United kingdom EIS Investments
The Enterprise Investment Plan (EIS) continues to be created by the United kingdom Government to inspire private investment into small, high-risk buying and selling companies by providing a variety of tax incentives.
Supplying the actual investments produced by the EIS are held not less than 3 years (for Tax relief and tax-free growth), the present tax reliefs readily available for United kingdom investors are:
30% upfront Tax relief as much as maximum investment of £1 million, which may be transported to the prior tax year
100% Inheritance Tax relief (provided the investments happen to be held not less than 24 months sometimes of dying)
Capital gains tax deferral for that existence from the investment
Tax respite from investment losses
If you’re searching to take a position across a variety of EIS managers and would really like a great way of administering your investment funds, the plan continues to be made with you in your mind.
EIS may meet your needs exactly if the following statements apply:
· You’ve significant savings and wish to diversify your investment funds while taking advantage of the tax incentives
· You’re keen to take advantage of the growth potential provided by purchase of smaller sized companies
· You want to lessen the potential Inheritance Tax due in your estate
· You want to lower your Tax liability
· You need to defer a capital gain
· You’ve got a significant pension fund but they are now uncovered towards the Annual Pension and/or Lifetime Allowance
· You’ve elected for Pension Enhanced Protection or Fixed Protection
· You’ll need a tax efficient savings vehicle with no limitations mounted on pensions
· You’re a United kingdom resident non domicile and also remit overseas earnings and capital gains tax-free
We feel that EIS/SEIS portfolios would be the investment of preference if you wish to make bigger contributions to finance your retirement inside a tax joyful manner.
However, the tax advantages of investing ought to be your secondary and never primary reason behind investing. EIS (and SEIS) is made to offer an excellent investment chance on its own.
Investors can pick to take a position with an offer to buy new shares straight into an EIS qualifying company. The greatest advantage of this method would be that the investor has direct control of an investment. However, very few individuals have the abilities needed to handle the required research needed and the possible lack of thorough research carries extremely high-risk.
Investors that need a far more diverse portfolio might find this investment option rather less attractive as “all of their eggs come in one basket”. Furthermore, exactly the same benefit (additional control) is yet another drawback as investors won’t have the advantages of dealing with professional advisors.
A discretionary service:
This method enables investors to take a position their EIS/SEIS money via a discretionary manager. For many investors the attractive facet of this method is use of professional advice and knowledge via qualified and trained personnel and suggested with a financial advisor. An advisor will probably simplify an investment process by handling special documents and along with other details.
However, just like an immediate investment, the customer will probably be committed to a small amount of companies and incredibly uncovered towards the fluctuation in valuation
Use a platform offering EIS/SEIS solutions for EIS/SEIS investors, assisting to simplify the EIS investment process. From individuals searching at long term investment (possibly for individuals thinking about inheritance tax (IHT)) to individuals searching for additional “asset focused” investments, to individuals thinking about Seed EIS investment.
Using the accessibility to an array of managers, clients and advisors can considerably reduce risk with greater diversification all within one form.