Over the course of the festive season we’ll be bringing you an advent calendar’s worth of tax and financial tips. Some of them might even be a little Christmassy! If you’re a company looking for investment or an individual looking to make an investment, then day 11 of advent brings generous gifts in the form of…
Enterprise investment schemes
Investment schemes such as the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) can be a valuable tool for both companies seeking investment and those looking to make an investment.
Provided various conditions are met, the income tax relief available to investors is exceptionally generous and gains made upon selling the shares will be exempt from capital gains tax. There is also scope to defer current capital gains if those gains are reinvested into an EIS or SEIS qualifying company.
For the company seeking investment, it is therefore a huge draw to be able to say that the shares the investor will be buying qualify under one of these schemes.
It’s commonly thought that these sort of investments are only made by the super-rich but this is not our experience, especially with the rise of crowdfunding. The reliefs are so generous that no company or individual can overlook these schemes.
Beware 1: this is a tremendously complex area of taxation so you should always take advice from a qualified accountant.
Beware 2: as with any investment, you are at risk of losing your capital. Private companies represent the riskiest of all investments so you should take professional advice from a qualified IFA.
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