Unregulated Investments

Currently you are not an Ascot Wealth Management Client. You have chosen to receive financial advice through Ascot Wealth Management for this unregulated investment only.

You are   and have not received any advice on any other products through Ascot Wealth Management.

You are approved as suitable for this unregulated business for the following reasons: [delete where appropriate]

  • An annual income during the financial year preceding the date below, to the value of £100,000 or more. As… in PAYE statements.

  • Net assets throughout the financial year, to the value of £250,000 or more. Net assets for these purposes do not include:

(i) The property which is my primary residence or any loan secured on that residence;

(ii) Any rights of mine under a qualifying contract of insurance within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001; or

(iii) Any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled.

  • Have made more than one investment in an unlisted company over the previous 2 years. [Insert details]

  • Have worked in the private equity sector in a professional capacity. [Insert details]

  • Director of a company with an annual turnover of at least £1 million. [Insert details]

In addition to the above you also: [delete if not appropriate]

  • Currently have a Capital Gains Tax Liability. [Insert details]

You were signed off as a suitable investor for these unregulated investments before you were presented with and exposed to the various opportunities available.

You received financial advice on this investment and Ascot Wealth Management has completed thorough financial planning analysis considering all aspects of your personal and financial situation to determine whether this unregulated investment fits in with your overall financial position, aims and objectives.

In addition you have also received tax advice in regards to SEIS and EIS unregulated investment opportunities which offer generous tax benefits.

Our procedural vetting is up to the standard requested for UCIS investments.

What is Seed EIS/EIS? 
The Seed Enterprise Investment Scheme, also known as Seed EIS is an extension of the existing Enterprise Investment Scheme (EIS) and was introduced in April 2012.

The SEIS and EIS schemes offer generous tax benefits to investors while simultaneously encouraging investment in UK small/early stage start-ups. The SEIS was designed to help boost economic growth in the UK through the promotion of entrepreneurship, and to help SME’s obtain funding which wasn’t forthcoming through other avenues. The EIS was also designed to encourage individuals to invest in smaller, higher risk trading companies by offering a range of tax reliefs. EIS qualifying companies tend to be at a more advanced stage than early stage SEIS qualifying companies.

Under the Seed Enterprise Investment scheme (SEIS) an individual can invest up to £100,000 into SEIS qualifying companies in one tax year and under EIS individuals have the ability to invest up to £1 million. 

There are several generous tax benefits for investing into an SEIS or EIS qualifying company. These include: 

  • You will be able to claim 50% income tax relief on qualifying SEIS investments and 30% income tax relief on qualifying EIS investments. The amount is not dependent on your rate of income tax. 

  • If you dispose of an asset in the year 2012/13 which would give rise to a chargeable gain this can be made exempt by reinvesting into SEIS/EIS qualifying shares, by choosing to ‘carry back’ on your investment, allowing investors to receive up to 28% capital gains tax relief. You would need to ‘carry back’ the whole investment and therefore the income tax relief would also be claimed against your income tax in the year 2012/13. 

  • If you dispose of an asset in the year 2013/14 which would give rise to a chargeable gain, 50% of this charge can be made exempt by reinvesting into SEIS/EIS qualifying shares, allowing investors to receive up to 14% capital gains tax relief. 

  • Any gains on the disposal, such as a transfer or sale of shares after a period of three years are also free from capital gains tax. Therefore the investor is exempt from any capital gains incurred from profit on the shares on the SEIS/EIS investment.

  • Loss relief in the event that the business fails within the three year period from the date of issue of shares. The amount of loss relief available is calculated by the total investment minus the 50% income tax relief and then multiplied but the individual’s tax rate. Therefore an investor can receive up to 45% loss relief.

Knowledge and Understanding: Rules for SEIS/EIS Investors

You were educated about unregulated Investments before being advised and before these investment opportunities were presented to you. The following rules apply to an investor in an SEIS/EIS qualifying business:

  • The shares must be held for a period of three years, otherwise the individual will be liable to pay back any tax relief they have received. 

  • You must not hold more than a 30% stake in the company. You must not have a ‘substantial interest’ in the company at any time from date of incorporation of the company to the third anniversary of the date of issue of shares. An individual is considered to have a substantial interest if the individual directly or indirectly possesses or is entitled to acquire more than 30% of:

    • the ordinary share capital of the company or any subsidiary of the company,

    • the issued share capital of the company or any such subsidiary, or

    • the voting power in the company or any such subsidiary.

  • Shareholdings of associates are also taken into consideration when calculating the 30% ownership.

    • ‘Associates’ include business partners, trustees of any settlement of which the investor is a settlor or beneficiary, and relatives. Relatives for this purpose include spouses, civil partners, parents, grandparents, children and grandchildren. Brothers, Sisters and fathers in law are not considered to be ‘associates’ for these investments.  

  • You must not be employed by the company at any time during the period from the date of issue of shares, to the third anniversary of that date. However you are not treated as an employee by the company if you are a director of the company under the SEIS scheme. However if you are a partner, executive director or an employee in an EIS qualifying company you are deemed to be connected with the company and will not be able to receive EIS tax relief.

  • SEIS tax relief only applies to companies which have been trading for less than two years.  

Your financial goals, needs and priorities
We established from your current personal and financial situation that currently your main needs and priorities are:  

  • To seek advice on Income Tax Relief.

  • To seek advice on Capital Gains Tax Relief.

  • To be able to make unregulated investments (SEIS/EIS investments) through a regulated entity, where you are able to receive the necessary tax advice.

  • To be able to build a portfolio of investments where you have visibility on the market value of your whole portfolio.  

In discussing your objectives we decided that; [delete where appropriate]

  1. you would make SEIS/EIS investments as part of your portfolio solution and tax planning.  

  2. you would be comfortable with only making this unregulated investment in the current tax year,

  3. this would be the first a series of unregulated investments made in this current tax year,

  4. you are comfortable in making the investment in the company that you have sourced and you are comfortable with the level of due diligence around the company and investment.

Level of Investment
Having discussed both your income and expenditure and your overall current financial situation, we have agreed that an investment of (x amount) will be suitable. This was decided on the basis that this was the maximum amount that you could afford to make in one unregulated investment or the limit on the investment that you were able to make under the SEIS or EIS investment scheme based on your tax position. 

Key Documents 
We provided you with a number of key documents. These documents are of vital importance and should be retained as part of your records as they contain information regarding the UCIS/unregulated investment, including: 

  • SEIS/EIS Risks and Rewards.

  • Investor Risk Warning.

  • Risk Profile Questionnaire

  • High Net Worth or Self Certification declaration.

  • Elective Professional Individual document.

  • Platform One Application form.

  • Platform One Seed EIS Application form.

  • Fact Find or Fact Find Disclaimer.

  • Evidence Self/Adviser Selected Panel.  

  • Conflict of Interest Form

We discussed these documents in detail, so that you have a clear understanding around SEIS/EIS investments. 

It is the responsibility of the business owner to ensure that you are provided with an SEIS 3 certificate for your investment. As you have been made aware the SEIS 3 certificate is not submitted to HMRC; however they may ask to see the original up to six years after the date the tax return claiming the reduction was filed. This SEIS 3 certificate needs to be kept for the six years, even if the shares are sold during this period.

If there are still any aspects which you are unsure about please contact me to discuss further. 

Attitude to risk
Having discussed the risks involved with investing in these unregulated investments; you have decided that you are comfortable with making these unregulated investments, and have completed an investor risk profile.

You understand that an investment in an SEIS or EIS company is high risk and therefore comes with the possibility of loss.

Within the Key Documents provided you will have received the ‘SEIS/EIS Risks and Rewards’ document of investing in an SEIS or EIS qualifying business. As previously discussed it is important to understand the risks with investing in any SEIS or EIS business and I would like to reiterate the following points:

  • Dilution– The investment you made is subject to dilution. If the business raised capital at a later stage it may issue new shares in the company to new investors. 

  • Loss of Capital– Statistically over 80% of start-ups fail, and it is important to be fully aware of the risks of losing your investment/capital as well as the benefits that can be gained. An individual’s financial situation will of course change from one period to another and it is vitally important to constantly review the suitability of making these investments. Individuals should not invest more money in businesses than they can afford to lose without altering their lifestyle.  

  • Illiquidity– Any investment that you make through the platform will be highly illiquid, as there is no secondary market for the shares of the investee company.  Even for a successful company, a floatation is unlikely to occur for a number of years from the time you make your investment. 

  • Rarity of dividends– Start-ups and small businesses rarely pay dividends. This means you are unlikely to see any return on capital until you are able to sell your shares in the investee company- which may not occur for a number of years after you make your investment. 

All statements concerning the tax treatment of products and their benefits are based upon the current interpretation of existing tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change. 

There are no guarantees on the return on your investment.  SEIS and EIS qualifying businesses are naturally high risk because they are early stage businesses. 

The advice provided to you is based upon the information you have disclosed and therefore, if this letter does not accord with your view of the situation or you require any further clarification please contact me immediately. 

Reviewing your financial arrangements in the future
You are not an Ascot Wealth Management Client for any retail business.

We have discussed the importance of regularly reviewing your financial arrangements.  An individual’s financial situation will of course change over time. To ensure your on-going suitability to make these investments, these suitability tests will be carried out in full again every six months or at the time of your next SEIS/EIS investment if earlier.  

Our Service Costs

You have invested (x amount). The estimated fees for this investment is (x amount) as outlined and agreed in the Client Agreement.

EIS Platforms Ltd offered this unregulated business whilst you are an active member of their investment network.

I am currently Director of both Ascot Wealth Management and EIS Platforms Ltd. You have signed and acknowledged the conflict of interest document between the two companies.

Cancellation rights
You are able to cancel, dispose of or sell your shares, under the conditions agreed in the share subscription document
(s) for each company. As you understand from the key documents and your education around the SEIS and EIS schemes the shares must be held for a period of three years from the date of issue, otherwise you will be liable to return any tax relief you have received in relation to the investments made.

Based upon the present financial information you provided to us and reviewing your objectives and needs in line with your current personal and financial situation I have recommended that:

  • You should make an investment of (x amount) into an (SEIS/EIS) qualifying business.

  • This will be made through a regulated entity- (Platform One Limited).  

Your Investment
Price of shares: 

Description of business: 

[Repeat if multiple investments made]

I trust that this letter, together with any accompanying documents, will clarify why I believe that you are suitable to make this unregulated investment(s), and this is in line with your financial objectives. 

Should you require any further information in regards to my recommendation, please do not hesitate to contact me. 



020 7071 3945


Throughout our site you will find links to external websites. Although we make every effort to ensure these links are accurate, up to date and relevant, we cannot take responsibility for pages maintained by external providers.