Private Equity Budget 2011 Notes

    View Author March 2011


    Please see the note which overviews measures set out in the Chancellor’s 23 March Budget which are particularly relevant for private equity.

    The good

    • The entrepreneurs’ relief lifetime allowance is to be expanded from £5m to £10m. In cash terms this is worth another £900k. Therefore entrepreneurs’ relief planning for both managers and co-investors will come into even sharper focus on private equity deals.
    • The cuts in the UK’s CT rate will be accelerated. The CT rate is to be cut to from 28% to 26% for 2011/12 declining to 23% for 2014/15.
    • EIS relief will be extended to plug the equity gap. The rate of EIS relief will be raised from 20% to 30% for the 2011/12 and, subject to obtaining EU state aid approval, the maximum investment in a tax year will be increased from £500k to £1m from 2012/13.