EIS & VCT

Enterprise Investment Scheme & Venture Capitalist Trust

EIS

Enterprise Investment Scheme

An Enterprise Investment Scheme (EIS) is a tax relieving investment designed to encourage private investment into small unquoted companies carrying on a qualified trade in the UK. They offer several tax relieving benefits:

  • Capital gains tax deferral when gains are reinvested into other EIS eligible companies.
  • Income tax relief of 30% (50% for a Seed EIS)
  • Capital Gains Tax exemption after 3 years of investment
  • Loss relief when EIS shares are sold at a loss, either by setting against the investor’s Capital Gains Tax or income tax bill in the year of disposal.
  • Carry back relief to a previous year.
  • Reduction or elimination of Inheritance Tax on eligible EIS shares held for two years and at death of the investor.
As an EIS invests in ‘start up’ companies they are deemed higher risk than more traditional investments and is often used when other mainstream tax efficient avenues have been exhausted.

Please feel free to contact us for advice on whether an EIS is suitable for you.

VCT

Venture Capitalist Trust

A Venture Capitalist Trust or VCT is similar to an EIS as it invests in small entrepreneurial businesses across the UK in a wide variety of sectors. They provide the following tax benefits:

  • Income tax relief of 30%
  • Tax free dividends
  • Tax free growth
Unlike an EIS, a VCT does not provide the ability to carry back tax relief to a previous year. Shares in a VCT must be held for 5 years minimum and the VCT has to retain its VCT status throughout.

Again a VCT  is deemed higher risk than more traditional investments and is often used when other mainstream tax efficient avenues have been exhausted.

Please feel free to contact us for advice on whether a VCT is suitable for you.

 

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Location & Contact

Lifetime IFA
01803 526 171
Monday – Friday 9am – 5pm

FCA Risk Warning

The value of your investments can go down as
well as up, so you could get back less than you
invested