Enterprise

Investment Scheme

The Enterprise Investment Scheme (EIS) is the name of a scheme which encourages individuals to invest money in shares issued by qualifying unquoted companies trading wholly or mainly in the UK.

 

In order to attract investment ‘advance assurance’ can be requested from HMRC that the investment opportunity qualifies under the EIS rules.

Furthermore, when trying to obtain investment it is highly likely that an investment prospectus will need to be drafted to give to potential investors.

 

We have experience in obtaining advance assurance from HMRC and have prepared investment proposals and implemented EIS schemes for many clients.

 

The Enter rise Investment Scheme encourages individuals to invest, as subscription for eligible shares in a qualifying EIS company can benefit from the following tax reliefs:

  • income tax relief for the investor of up to 30% of the amount invested for subscriptions on or after 6 April 2011. For subscriptions made prior to 6 April 2011, the rate of income tax relief was 20%

 

  • any capital loss on the EIS shares is an allowable loss for capital gains tax but gains are exempt (if certain conditions met)

 

  • the investment can be used to defer capital gains tax on the sale of any asset

 

Generally speaking, EIS companies are higher risk investments. The nature of the conditions to be met by the company means that they have to be small businesses and therefore have a higher probability of failing (although the potential rewards if the company grows may be very attractive).

Copyright 2015. All Rights Reserved.  | Proudly Designed by Born Communication