Despite these changes, experienced venture capital EIS investment managers are well-versed in mitigating the risks of investing in the early stage, high growth potential companies that have always qualified for EIS.

With their generous tax reliefs (which are untouched), EIS is well worth considering for your clients’ portfolios. And despite the changes, well-managed EIS portfolios still have strong potential for downside protection.

Tax benefits of EIS

  • 30% income tax relief
  • Capital Gains Tax deferral for gains invested into EIS qualifying companies
  • Capital Gains Tax exemption for profits from the sale of EIS qualifying shares
  • Loss relief allowing any losses (less the income tax relief already received)
  • Likely Business Relief qualification with potential 100% IHT saving on EIS-qualifying shares

Tax treatment depends on the individual circumstances of each client and may be subject to change in future.

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