The most recent Award-winning EIS investment Company that we have worked with is from The City Of Cambridge
THE ENTERPRISE INVESTMENT SCHEME (EIS)
The Enterprise Investment Scheme (EIS) is a government sponsored investment scheme, offering a range of tax relief benefits to investors who invest in smaller companies which are not listed on the stock exchange.
The following information has been sourced from the official HM Revenues and Customs website; please refer to their website for more details on the following guidelines.
CAPITAL GAINS TAX
This is available to individuals and trustees of certain trusts. The payment of tax on a capital gain can be deferred where the gain is invested in shares of an EIS qualifying company. The gain can arise from the disposal of any kind of asset, but the investment must be made within the period one year before or three years after the gain arose.
There are no minimum or maximum amounts for deferral. And it does not matter whether the investor is connected with the company or not. Unconnected investors may claim both Income Tax and capital gains deferral relief.
There is no minimum period for which the shares must be held; the deferred capital gain is brought back into charge whenever the shares are disposed of, or are deemed to have been disposed of under the EIS legislation.
| Gross investment | £100,000 |
|---|---|
| Less: Income Tax relief at (30% of £100,00) | £30,000 |
| Cost of investment | £70,000 |
| Capital gain Tax liability deferred | £28,000 |
| Net initial cost of investment | £42,000 |
Net initial cost of investment
CGT assumed at 40% the gain is deferred until there is a chargeable event, such as a disposal of EIS shares or, if earlier, a breach of the E.I.S rules
LOSS RELIEF
If the shares are disposed of at a loss, you can elect that the amount of the loss, less any Income Tax relief given, can be set against income of the year in which they were disposed of, or any income of the previous year, instead of being set off against any capital gains.
Guarantees
1. Upfront 30% Return
2. Tax Free Investment
3. Loss Relief Protection
LOSS RELIEF EXAMPLE:
| Released value of shares | £0 (nil) |
| Gross investment in shares | £10,000 |
| Less: Income Tax relief at 30% | £3,000 |
| Loss before Tax relief | £7,000 |
| Tax relief at 30% | *£2800 |
Net cost of investment (loss)
Assumed net loss offset against other income taxable at 40% as opposed to chargeable gains which are taxable at 28%
See VCM70000 for more information about share loss relief
INVESTMENT RISKS
As with any financial investment, there is always an element of risk and it is very important that you do not invest what you cannot afford to lose. While it is not possible to guarantee the success of any investment, we want the best for our investors and so we are very selective in the opportunities that we offer.