VCT & EIS

Enterprise Investment Schemes (EISs)

Enterprise Investment Schemes (EISs) are tax relieving investments 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 in other EIS eligible companies
  • Income Tax relief of 30% (50% Income Tax relief for Seed EISs)
  • Exemption from Capital Gains Tax on any gains after three years from the investment
  • Loss relief when EIS shares are disposed of at a loss, either by being set against the investor’s capital gains or set against the income tax bill in the year of disposal
  • Carry-back: applying tax relief to a previous year
  • Reduction or elimination of Inheritance Tax on eligible EIS shares held for two years.

Due to the nature of investing in small start-up companies, these schemes are deemed to be relatively high risk. Please contact us if you’d like to discuss whether this type of investment is suitable for you.

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are similar in nature to EISs, as they invest in small entrepreneurial businesses across the UK in a wide variety of sectors. They offer the following tax benefits;

  • Income Tax relief of 30%
  • Tax Free Dividends
  • Tax Free growth

Unlike EISs, VCTS do not offer carry-back for tax relief to a previous year. The shares in the VCT must also be held for 5 years minimum and the VCT continuing to hold its VCT status throughout.

Due to the nature of investing in small start-up companies, these schemes are deemed to be relatively high risk. Please contact us if you’d like to discuss whether this type of investment is suitable for you.

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