Advisers looking to place their clients into EIS funds as a way of tax mitigation should ensure they choose a provider capable of investing the cash quickly, according to Richard Hoskins, co-founder of Kin Capital.

Investors in EIS products can receive capital gains tax relief of 50 per cent for investing in early stage companies.

But, according to Mr Hoskins, the tax relief is only given once the money is invested in the underlying company.

The problem occurs with EIS managers that are unable to make the investments in a period of less than one year, he said.

The typical time period to fully invest a client’s money is likely to be 18 months, meaning the adviser cannot always know in what tax year the underlying client will receive the tax break, making financial planning more difficult.

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