HC Deb 09 July 1981 vol 8 c192W
Mr. Best

asked the Chancellor of the Exchequer whether he will make a further statement on the business start-up scheme.

Mr. Peter Rees

Yes. In his statement of 4 June my right hon. and learned Friend the Chancellor of the Exchequer announced certain important amendments to the business start-up scheme and indicated that the Government would be considering a number of further developments, in the light of the views expressed in Standing Committee. Some of these points were at that time subject to consultation, but had not then reached a point at which a firm decision could be announced.

The Chancellor is accordingly tabling today a number of further amendments. The most important of these are:

  1. (a) It is proposed to include within the scheme "ordinary" trades of wholesale and retail distribution. A new schedule lists factors which indicate when a trade is an "ordinary" trade of this kind as distinct from a mere speculative or financial investment in goods.
  2. (b) It is proposed to reduce from £1,000 to £500 the de minimis limit on the amount of investment in any one company in any one year on which an individual may claim relief.
  3. (c) A new clause is proposed, adapting the provisions of the scheme to requirements of "approved investment funds". Broadly, these will be funds bringing together a substantial number of potential investors (acting as nominee on their behalf) and spreading their investments over a number of separate business start-ups. In the case of these funds the new £500 de minimis limit (which refers to investment in any one company) will not apply, and there will be other, mostly machinery, provisions.
  4. (d) It is proposed to amend the rule that no sum on which start-up relief has been given, and not withdrawn, may be allowed as a deduction in a capital gains tax computation on a disposal of the shares. The new proposal is to allow one-half of such sums, but not so as to produce a loss for capital gains purposes.