tax - enterprise investment scheme (eis)
EIS is really three tax reliefs in one when you subscribe for new shares in a qualifying company. A saving of income tax at 20% on the amount you invest is available if you own less than 30% of the shares. If you qualify for this income tax relief then any future capital gains are tax free. Finally, and even if you own all the shares in the company, you can defer any capital gains you have been taxed on in the previous three years. Those gains come back into tax when the company is sold or liquidated but that could be many years from now.
Since 1997 we have dealt with over 40 Enterprise Investment Scheme investments. The purpose of EIS is to give people tax benefits when they invest in new a businesses. We have been involved in helping companies raise outside finance to fund their business activities but also we have used EIS to help mitigate capital gains and income tax.
Tax relief at 60% is still just possible for a certain class of individuals and so if you have significant capital gains you might want to consider whether there are business opportunities you might consider as an investment in order to secure tax relief.
We have helped clients with a busy schedule by managing their new business or by recruiting managers for them. One of our clients has made a huge tax saving and realised a long term ambition to own a pub in the countryside with a professional manager.
current issues
We are currently working with a small group of clients on setting up an investment opportunity. If you are interested then email info@tax.uk.com
business clients
If you are a business looking to raise outside funds from 'Business Angels' then the tax advantages of EIS will often be crucial in persuading them to invest. We can help you set up the scheme and gain advance clearance from HMRC so that your investors are reassured that the tax relief promised will be obtained.
international clients
We have advised individuals who have invested in EIS in order to postpone capital gains. If they moved overseas a significant time after the original investment was made, capital gains tax can be avoided.
individual clients
Individuals looking to mitigate income tax and capital gains tax are drawn to EIS. We have helped many individuals who have been planning to set up consultancy businesses and recommended EIS to give them a significant tax saving as well as providing funds for the business.