EU clears British venture capital tax breaks

BRUSSELS Britain won European Union approval Wednesday to give tax breaks aiming at increasing venture capital investment in small businesses.

Britain initially launched the three programs without seeking EU clearance necessary for all EU governments planning to give large subsidies to companies.

The European Commission said it had demanded and won changes to the plans so they would avoid triggering competition problems where a tax break to one company gives it an unfair advantage over others. It did not give details of the changes.

Britain plans to give up to 250 million pounds ($365 million) in tax relief to individual or corporate investors that buy minority stakes in small businesses qualifying for the programs. There is a cap of 2 million pounds ($2.9 million) in investor tax relief for each small business raising money.

The enterprise investment scheme, or EIS, will give tax breaks to private individuals. The venture capital trusts program, or VCTs, will give tax incentives to individuals investing through fund managers and the corporate venturing scheme, or CVS covers corporate investors.