Financial Adviser Hastings

Could Enterprise Investment Schemes be for you?


It is possible that the November Budget will reduce tax relief in schemes such as EIS so now is a good time to take advantage of the current rules. As our previous email stated, there are several ways to help reduce your tax bill. Enterprise Investment Schemes (EIS) are one to consider as part of your diversified portfolio.

Enterprise Investment Schemes

One of the government initiatives introduced to attract capital for smaller, early stage companies has now been running since 1994 and is well established in the tax efficient investment space; The Enterprise Investment Scheme, or more simply, EIS. Providing the underlying investments made by the EIS are held for at least three years, there are five separate tax advantages for which you may be eligible:

1) Income tax relief – Investors benefit from 30% tax relief. The maximum investment per tax year is £1,000,000, giving a maximum tax reduction in any one year of £300,000, providing you have sufficient Income Tax liability to cover it. As an example, an investment of £50,000 would enable you to reclaim £15,000 back in tax.

2) Capital gains exemption

3) Capital gains tax (CGT) deferral

4) Loss relief

5) 100% Inheritance tax relief after two years

To find out more, please visit our website.

As with any investment, the value can fall as well as rise and you may not get back what you put in.

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