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It’s CMU budget news – capital gains tax
By CMU Editorial | Published on Wednesday 23 June 2010
Finally in budget news, a happy voice from the investment end of the music business with regards another tax increase in Osborne’s budget.
Capital gains tax, the tax on profits from stocks, shares and property investments, is going up for anyone not in the lowest tax bracket, from 18% to 28%. Although the increase is actually quite a bit lower than many predicting, it is still a substantial increase for any rich people with healthy capital gains.
Which is good news for entertainment industry investment firm Edge, who operate so called ‘venture capital trusts’, where rich people invest cash into funds which Edge then invest into entertainment-based ventures. Such trusts are exempt from capital gains tax, as part of exemptions designed to encourage entrepreneurialism and investment in new business. Therefore the increase in capital gains tax should making investing in such trusts more attractive.
Edge founder David Glick told CMU: “We have been consistent in arguing that VCTs provide an ideal vehicle to encourage private capital to invest in the creative industries. On that basis, this looks like a progressive budget”.
Glick was also pleased with a change in VCT rules which means agencies like his can now invest in international business ventures; previously the tax exemption was limited to investments in UK-based companies. Glick continues: “This is a particularly welcome development in an international business like entertainment. Given Edge’s deep industry relations worldwide, I expect that this will open up significant new opportunities for our investors”.
