Private investor reliefs
Companies that wish to grow often need funding from outside sources other than banks. There are certain tax breaks available for private individuals who wish to invest in such companies, which tend to be relatively high risk. These tax breaks can reduce the net cost of the investment and hence the overall exposure should the business fail. However, the tax incentives should not of course cloud the commercial decision whether to invest.
Both the Enterprise Incentive Scheme (EIS) and the more recently introduced Seed Enterprise Investment Scheme (SEIS) can attract individuals to invest in start-up companies, or more mature companies looking to grow. The benefits available include an income tax deduction, capital gains tax deferral on existing gains on assets and tax free capital gains on the ultimate sale of the shares (subject to stringent conditions). Whether you are able to benefit from these reliefs will depend on your individual tax position. We can help you identify the potential benefits and then achieve them.
In addition, we can work closely with our professional intermediaries to advise you on possible tax efficient investments which are structured within an EIS wrapper. Or perhaps an investment into a Venture Capital Trusts (VCT's), which has similar tax reliefs available as for EIS.