Knowledge Centre Guide:
Frequently Asked Questions
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Here are some helpful FAQs (frequently asked questions). You can scroll down to browse or click the “quick links” here.

If you have any concerns that aren’t covered below, or need further help, send us a covering email to enquiries@growthinvest.com.

About GrowthInvest

General Questions

GrowthInvest are a UK based tax efficient and alternative investment platform.  Established in 2016, we make tax-efficient and private investments more accessible to wealth managers, financial advisers, and their high value clients.   We provide tailored digital solutions enabling efficient execution and ongoing administration of private asset portfolios, alongside the ability to onboard existing assets.

GrowthInvest is a trading name of EIS Platforms Limited, a company registered in England and Wales (08018312) at Warnford Court, 29 Throgmorton Street, London EC2N 2AT. EIS Platforms Limited (FRN: 694945) is an appointed representative of Sapphire Capital Partners LLP (FRN:565716) which is authorised and regulated by the Financial Conduct Authority in the UK.

EIS Platforms Limited (t/a GrowthInvest) is a privately held company with share capital being held by a mixture of GrowthInvest management and staff, HNW angel investors, platform corporate clients and strategic corporate investors. The management and shareholders are committed to the long-term sustainability, development and continued growth of the company.

GrowthInvest’s client base consists primarily of UK based financial adviser and wealth management firms and their advised clients.  We do have a small number of direct UK based High Net Worth and sophisticated investors, who are supported on a non-advised basis.

If you would like to find out more, or set up an initial demonstration and chat please contact enquiries@growthinvest.com and our team will discuss your key requirements and show you how our platform can help you provide a better experience to your clients. We can authorise and set up intermediary accounts for FCA authorised intermediary firms relatively quickly, and of course we provide full training and collateral.

Uniquely combining both listed and unlisted products in a single platform, we provide access to Venture Capital Trusts, Inheritance Tax Services (both AIM and Unquoted), Enterprise Investment Scheme Funds and opportunities, Private Equity and Venture Capital Funds (GP/LP and Semi Liquid) and Private company shares and debt.

We provide a full range of relevant investment wrappers including ISA, VCT ISA, SIPP, SSAS and GIA.

Absolutely, we have a dedicated onboarding team who will work with you to evaluate, digitise and bring onto the platform any existing alternative Investment portfolio, alongside all documentation. We thereby ensure greater clarity in one single, centralised view of client portfolio, which can be analysed and added to with confidence.

Yes, we are happy to discuss branding options for adviser firms.  It is straightforward to include your logo, alongside certain elements reflecting your corporate colours, and we can also set up dedicated URLs and landing pages for your clients.

Technology

GrowthInvest is delivered on our own smart proprietary technology which delivers security, efficiency, and simplicity in this complex marketplace. Our award-winning portal is designed around our clients and delivers the very best outcomes. Underpinning our customer-facing components is a cloud-based platform operating in a secure environment, hosted within the UK. We have architected our platform to be cloud-native using the latest technology, providing significant benefits in security, scalability, and resilience.

In addition to our core platform, we’ve also built an integration platform which is responsible for managing data flows in from partners such as fund managers and market pricing platforms and out to adviser platforms. Our approach to open integrations places us at the forefront of the industry in ensuring that you can make the most of the data we hold.

We are happy to provide more technical information or to set up a call with our technology team as required.

Yes – a fundamental component of our platform is our API which is developed alongside the web interface. This allows customers with their own development teams to integrate their own systems into ours in real-time or to develop their own user interface.

We also know that not everyone can or wants to develop their own custom systems and so we also provide a series of off-the-shelf integrations into a wide range of partners including administration and back-office systems, leading CRM systems and many more.

Yes. We have a specific client portal that is available to all clients, and has much of the same functionality, look and feel as our adviser platform view. We would be delighted to show you the platform and the client portal view as part of a demonstration. For more information please see our Platform are on the website.

Security

GrowthInvest uses two main FCA regulated custodians Woodside Corporate Services (unlisted – EIS, IHT and private markets) as well as James Brearley & Sons (VCTs, AIM and Listed products). All client money is held securely in major UK banks and is segregated from our own funds, and those of our custodian in accordance with the FCA’s client money rules. In the unlikely event of GrowthInvest or one of our custodians going in to administration, the client assets and money would be protected and ringfenced from creditors.

The GrowthInvest technology stack is hosted within the UK and all platform data is stored within the UK.

We make use of a series of technical and business measures to secure customer information including:

  • Strong authentication: Our platform supports the use of multi-factor authentication (MFA) on all logins. Our internal systems are all configured to require MFA from authorised users.
  • Encryption: We make use of the latest security algorithms to encrypt data at rest in our system and in transit, both in our platform and where we are working with advisers and partners. Our data loss prevention tools ensure that data transferred to partners is appropriately protected.
  • Active security scanning: From proactive scans of our software during development through to post-deployment continuous penetration scanning, our systems are regularly probed for weaknesses and the results surfaced directly to our CTO for prioritisation and remediation planning.
  • Monitoring: Our platform and internal systems collect information on every action taken and AI-based analysis helps us identify suspicious activity in addition to helping us proactively identify problems and fix them, often before the customer has reported them.
  • Security culture: From adopting “security by design” as a principle in our development, to staff training and support as well as periodic red-team exercises to test our staff and procedures, we place a premium on developing a culture within the business of embracing our guardianship of customer information.

GrowthInvest is compliant with the UK Data Protection Act 1198 (DPA). The data controller (as defined under Data Protection Legislation) for GrowthInvest.com is EIS Platforms Ltd. We are registered as a data controller with the Information Commissioner’s Office and our registration number is ZA114581.

We are always happy to discuss our resilience plans in more depth, further information and related Data Protection and Information Security policies are available on request.

GrowthInvest makes significant use of cutting-edge cloud technologies to provide a highly resilient service and ensures that the primary service and all backups are operated across multiple geographic locations. Our goal is to provide 100% uptime, and we put considerable resources into resilience, security and testing on an ongoing basis.

We are always happy to discuss our resilience plans in more depth, and a copy of our latest Resilience Policy, incorporating disaster recovery is available on request.

Client Security

If you’ve received an email from the GrowthInvest team or from our platform which you think might not be genuine:

  • Do not click on any links in the email
  • Do not reply or forward the email on
  • Contact our support team and verify any information provided
  • Log in to your platform to verify the information within

We will never ask you for your password or security code in email and you should never share those with anyone else.

We use different techniques to keep your account safe and ensure that only you can access your data. We will never ask you to reveal your password or your security code – these are your secrets and you should never share them with anyone.

If you can’t remember your password or can’t get your security code to work, you can reset your security information by using the Forgotten your password link on the login page. This will trigger both a password reset and, if you have one set, a security code reset. You may need your mobile phone to reset your security code.

If you are at all suspicious about any information or you’re having trouble, you can ask our support team for help.

If you think that you’ve seen suspicious activity on your account or that you think your account may have been compromised you should contact us immediately.

Our support team will be able to advise you on the next steps and help ensure that funds in your account are secure.

No matter how sophisticated our security is, you have a vital role to play in keeping your data safe. Read more about what you can do.

  • Never share or divulge your login information – Your password and, if you choose to use one, your security codes are your secret to keep. We will never ask you for them and you should never share them with anyone else.
  • Enable multi-factor authentication on your account – we recommend you protect your account with a constantly changing code that only you have access to. This helps increase the security of your account and protects it from attackers. To find out more about enabling MFA on your account, click here.
  • Use strong passwords – The password you use on our platform should be long and difficult to guess. You can use a sentence, or a sequence of words, or a long string of letters, numbers and symbols.
  • Don’t use this password anywhere else – you should use different paswords for each site that you use online so that if anyone guesses a password or a site is compromised, it limits the damage that the attackers can cause.
  • Use a password manager – The best way to pick complex passwords is to use a password manager to generate and store unique passwords for each site. We recommend password managers like 1Password and design our site to work well with them.
  • Protect your PC – You should always ensure that your computer is protected with an anti-virus and anti-malware tool and that this is kept up to date. For more information on protecting your computer see https://www.getsafeonline.org/protecting-your-computer/viruses-and-spyware/
  • Don’t use insecure Wi-Fi – Public Wi-Fi in cafes, hotels and public spaces are often unsecured leaving you vulnerable to someone stealing your information on the network. You should look for a Wi-Fi network protected with a password, or use a VPN service to protect your data.
  • Protect your mobile phone – with more and more apps on your mobile phone having access to your data, you should keep your phone safe with malware and app security scanners as well as remote “find my phone” services. You should also consider using a “remote wipe” or “remote delete” service on your phone.
  • Treat emails with caution – Emails are not a secure way of sending data and you should always look carefully at any emails asking you to provide information. Check the address they came from as well as what they look like. We will never ask you for confidential information by email. More often, scammers are sending emails that look like valid emails but contain links to nefarious sites which will record your password or confidential information before sending you to the right place. These scammers will then use that information to try and attack the real service you thought you were accessing. If you find yourself having accidentally clicked on one of those links and provided you information, you should contact us immediately so that we can place your account under additional security measures and help you reset the security on your account.
  • Be wary of unexpected messages – Common signs of investment scams include unsolicited contact (via email, telephone or post), pressure to invest in a time-limited offer; promise of guaranteed returns and low or non-existent risks or being asked not to discuss this special offer with anyone else. Read more about the characteristics of these boiler room scams, and how to protect yourself on the FCA website: http://www.fca.org.uk/consumers/scams/investment-scams/share-fraud-and-boiler-room-scams

Investing

The GrowthInvest platform is totally unique in its range of investments. We pride ourselves on bringing our clients investment opportunities that have not traditionally been available within the UK platform market.

Uniquely combining both listed and unlisted products in a single platform, we provide access to Venture Capital Trusts, Inheritance Tax Services (both AIM and Unquoted), Enterprise Investment Scheme Funds and opportunities, Private Equity and Venture Capital Funds (GP/LP and Semi Liquid) and Private company shares and debt.

We will consider investments that are not already on our platform, as long as they pass our due diligence checks, which will need to include direct contact with the fund manager and/or promoter of the investment in question.

Yes, we can set up and manage a specific panel of investments at firm, or at client group level.  These can be dynamic and flexible, allowing for certain set investment periods of VCTs for example.  We are also able to provide our intermediary clients with the ability to also access a whole of market view, allowing for the monitoring of investments under consideration for the panel.

Our offer pages contain all the latest information, documents, news, research and videos from fund managers, underlying investee companies and industry experts.

Yes. All client investment applications are tracked every step of the way, and we provide complete visibility to the adviser and client on the progress of the approval. This includes adviser approval, client interaction with our digital application forms, as well as the flow of client money from the client platform account through to the confirmation of funds received.

Fees & Charges

GrowthInvest charges clients on the basis of their overall Assets under Administration (“AuA”). Our standard charges are based on a 0.25% AuA charge with an annual minimum charge of £250 per client account. There are also a number of additional administrative charges. A full copy of our Fees and Charges is available on request.

Yes. GrowthInvest can facilitate both initial and on-going adviser charges on client accounts. Fees are calculated on a monthly basis, and applied quarterly, one month in arrears.

Fees are calculated on a monthly basis, and applied quarterly, one month in arrears.

Support & Service

We pride ourselves on providing excellent client service, backed by detailed industry knowledge. Our dedicated Client Services Team are always ready to answer any questions you or your client may have, providing support and guidance in this sometimes complex area of investment and planning. This sits alongside a whole host of educational guides, webinars, podcasts and FAQs in our Knowledge Centre.

Yes. Our Engage program is specifically designed to make sure that we meet the specific training and onboarding requirements of our clients, and puts in place an agreed plan of training and regular touchpoints. This is both for the vital first few weeks and months, and also on an ongoing basis. Our dedicated team use a range of specifically created collateral for advisers and their clients, to make sure that the initial client set up, investment process and transfer of any existing assets are all run as smoothly as possible. 

We work with adviser firms to plan the most effective and efficient way to manage the initial set up and onboard of clients, and their existing holdings across their entire tax efficient and alternative investment portfolio. Our dedicated onboarding team who will work with you to evaluate, digitise and transfer it all onto the platform, benefitting from daily pricing and all relevant documentation and updates.

Yes they can, especially for any questions around functionality or access to the client portal itself. We do not provide advice, and we will always copy in the right financial intermediary contact in any written responses, and refer clients back to their financial adviser for any significant questions.

Complaints

We believe that all our clients deserve an excellent service.  If you feel something is not up to our high standards, we will try very hard to put it right as quickly as possible.  You can contact us anytime:

Email: Complaints@GrowthInvest.com

Phone: 0300 303 0037

Address:
The Chief Operating Officer
GrowthInvest
Warnford Court
29 Throgmorton Street
London
EC2N 2AT

As a regulated firm we are obliged to deal with any compliant in accordance with FCA guidelines, and an appointed representative, we are obliged to notify our principal of the complaint and respond in conjunction with them.

When we receive your complaint, written confirmation, including contact details of the person dealing with the request and a copy of our full complaints procedure, will be sent to you within three business days. If we are unable to resolve within three business days, the GCA allows us eight weeks in which to investigate the matter. Within eight weeks you should receive our final response and any offers associated with that. If we cannot resolve within eight weeks, we will communicate with you to confirm when a final response will be sent.

If you are classified as an eligible complainant, and you do not feel that your complaint has been resolved satisfactorily within 8 weeks, you may refer your complaint to the Financial Ombudsman Service.

Investments & Products

AIM IHT (Alternative Investment Market Inheritance Tax) Products

AIM stands for the Alternative Investment Market and is a sub-market of the London Stock Exchange.  AIM opened in 1995 and over the years has helped  founders and entrepreneurs fulfil their growth ambitions and potential, by allowing them to access capital from the public market. The companies listed on AIM tend to be smaller than those on the primary LSE market, and thus more speculative. AIM offers more relaxed listing and regulation requirements than the main LSE market, making it attractive to smaller companies.  Not all AIM listed companies qualify for business relief, there are particular criteria and hence why it is advisable to work with a specialist AIM manager to invest in qualifying AIM companies.

AIM IHT products are portfolios of qualifying AIM shares managed by specialist AIM managers to help investors leave more wealth to their loved ones.  Once these qualifying AIM shares have been held for more than two years they will qualify for Business Relief and therefore not be liable for inheritance tax upon the death of the investor.

If shares are held for a minimum of two years and remain held at the investor’s death, they can be passed on to beneficiaries without incurring inheritance tax.

AIM IHT products provide for efficient wealth transfer through the potential for Inheritance Tax relief.  They benefit from the fact that after only two years, the investment becomes qualifying, this can be a more efficient way of protecting wealth upon death.  As the shares are listed on the AIM market, there is liquidity should you need to access your capital again.  Alongside all these benefits there are potential capital gains and dividend income from the companies into which you invest.

Many AIM providers will have income or growth options available when investing.  Income portfolios will target dividend paying qualifying companies, whilst the growth portfolios will target qualifying companies that have most growth potential, though they may still pay dividends. Generally dividends are reinvested into the portfolio when the fund manager rebalances the portfolio, however distributions can be requested from some portfolios and this will vary from product to product.  Unlike Asset Backed IHT portfolios, AIM IHT portfolios rarely quote a target return and this is largely due to the speculative nature of the AIM market.

There is a minimum holding period of two years to qualify for potential inheritance tax relief.  Thereafter, the investment would need to be held upon death in order to avoid an Inheritance Tax charge.  The investment can then be passed down to beneficiaries, or liquidated.

Yes, investors will have access to regular updates and reports about the performance and status of their Asset Backed IHT investments via the GrowthInvest platform.  This is alongside any other tax efficient or private investments they may hold.

Fee structures vary by manager and should be discussed with your adviser, however some products may apply an ongoing charge to manage your investment.  This would be alongside an initial charge paid up front from your investment, and indeed any initial or ongoing charges applied by your adviser.

AIM IHT investments do not target an exit like some venture based products.  The product is designed to be held for the long term until the death of the investor.  During that period the investment manager would endeavour to deliver growth and income aligned with that of the AIM index, and therefore the UK economy.  There is, however, the opportunity to redeem your holding, should you need access to the capital. This will subject to the redemption policies of the relevant products, and it should be noted that the redemption proceeds will immediately come back into charge.

Investors can elect to receive income, or reinvest the returns into the product, therefore these additional funds remain outside of the investor’s estate. 

AIM IHT can serve as part of a diversified portfolio, offering exposure to small cap equities that will track the UK economy an d has the potential to outperform the large cap indices.  This being due to the fact that the companies are smaller and faster growing, it does however mean that these companies are riskier than the larger companies in the FTSE100.

Selling shares in AIM IHT may be subject to specific terms outlined in a fund’s agreement.  Many provide clarity on how often they offer redemption and how long it would take to redeem a holding and receive the proceeds.

Asset Backed IHT Products

Asset Backed IHT products allow investors to invest in shares of unquoted UK companies making a positive impact on the UK economy, aiming for a steady, predictable, and modest level of return.

The selection process focuses on companies expected to qualify for Business Relief, providing an inheritance tax exemption if the investment is held for at least two years at the time of death.

Asset backed IHT products provide a theoretically low risk investment, than can quickly qualify for IHT exemption, after just two years of holding the investment.  These products can also be liquidated should the investor require the capital back, which gives the investor more control than traditional IHT planning mechanisms. Please note  that liquidity is subject to the redemption policies of the relevant products.

Returns and dividends in Asset Backed IHT can vary based on the performance of the underlying unquoted UK companies.  Investors can elect to receive income,  or reinvest into the product, therefore remaining outside of the investor’s estate.

There is a minimum holding period of two years to qualify for potential inheritance tax relief.  Thereafter, the investment would need to be held upon death in order to avoid an Inheritance Tax charge.  The investment can then be passed down to beneficiaries, or liquidated.

Yes, investors will have access to regular updates and reports about the performance and status of their Asset Backed IHT investments via the GrowthInvest platform.  This is alongside any other tax efficient or private investments they may hold.

Fee structures vary by manager and should be discussed with your adviser, however some products may apply an ongoing charge to manage your investment.  This would be alongside an initial charge paid up front from your investment, and indeed any initial or ongoing charges applied by your adviser.

Asset Backed IHT investments do not target an exit like some venture based products.  The product is designed to provide long-term stable returns such that the investor can hold this until death.  There is, however, the opportunity to redeem your holding, should you need access to the capital. This will subject to the redemption policies of the relevant products, and it should be noted that the redemption proceeds will immediately come back into charge.

Investors can elect to receive income, or reinvest the returns into the product, therefore these additional funds remain outside of the investors estate.

Asset Backed IHT can serve as part of a diversified portfolio, offering exposure to unquoted UK companies many with sustainability credentials as well.

Selling shares in Asset Backed IHT may be subject to specific terms outlined in a fund’s agreement.  Many provide clarity on how often they offer redemption and how long it would take to redeem a holding and receive the proceeds.

Business Relief (BR) Investments

Understandable, there are many different names associated with the same kind of investment.  Put simply an IHT (Inheritance Tax) Investment is an investment product that is designed to help manage Inheritance Tax liabilities upon death. These products can also be called ITS (Inheritance Tax Service) or sometimes an EPS (Estate Planning Service).  All of these products utilise the governments Business Relief (BR) scheme to qualify for the tax relief.

BR is an inheritance tax exemption introduced in the 1976 Finance Act, allowing specific investments in qualifying trading businesses to be passed on to beneficiaries without incurring inheritance tax.

Investing in an IHT product that utilises BR has a number of benefits.  It is far simpler than using trusts and faster to qualify for IHT exemption than gifting.  Alongside this the investor has more control of the assets, enabling them to liquidate these holdings should they need to access the capital and bring this back into their estate.

Yes, investors do retain control over their investment, allowing them to sell and retrieve proceeds if necessary. This is subject to the redemption policies of the relevant products.  Also, it’s crucial to note that sold shares or withdrawn funds are no longer exempt from inheritance tax.

Certain investment managers can establish portfolios featuring AIM-listed or unquoted companies. The investment must be held for a minimum of two years and remain held at the investor’s death.

These schemes will always subject to the risk of changing tax rules, if the government withdrew or changed the rules around Business Relief, then all IHT products would be affected.

At a product level the risks differ based upon the underlying assets.  AIM IHT products hold portfolios of small growing companies, there is clearly a risk around volatility in the valuation of these companies, and the AIM index as a whole.  Asset backed IHT products, as the name suggests, invest in portfolios of unquoted companies that are asset backed and in theory low risk, such as forestry or renewable energy companies.  For this reason, the returns are lower, however, there is always a risk that these companies underperform and therefore their value decreases.

Enterprise Investment Scheme (EIS)

Introduced by the government back in 1994, the EIS aims to facilitate the growth of small businesses by providing them with funding opportunities. When individuals invest in companies eligible for EIS, they can potentially benefit from substantial tax advantages.

EIS-qualified companies are typically small, often privately held entities. They generally have assets valued at less than £15 million and fewer than 250 employees. However, there are now more relaxed criteria for firms engaged in knowledge-intensive activities.

Companies eligible for EIS investment come from various sectors and industries. However, they must meet specific criteria, such as being actively involved in trade with the goal of generating profits. Certain exclusions apply, including businesses dealing in land, commodities, or shares, as well as those with significant asset backing or contractual revenue streams.

Additionally, there are limitations based on a company’s size and age, although knowledge-intensive enterprises enjoy certain exemptions.

This term generally refers to innovative, often young businesses engaged in research, development, or innovation activities. For instance, a company working on the development of new pharmaceuticals might fall into this category, while a retail chain expanding its physical locations typically would not. Approval for knowledge-intensive (KI) EIS funds was granted in March 2020.

KI funds must allocate at least 80% of their portfolio to such companies. Investors in KI funds receive a single EIS5 certificate once the fund invests 90% of its capital within 24 months of closing. In contrast, investors in non-approved funds receive individual EIS3 certificates per investee company.

Investors in EIS can benefit from a range of upfront and ongoing tax reliefs, including up to 30% income tax relief, tax-free growth, capital gains deferral, inheritance tax relief, and loss relief on exit. However, these benefits are subject to certain conditions and the company maintaining its EIS status.

Income tax relief can typically be claimed after shares are allotted and an EIS3 certificate is received, a process that usually takes around six months. For KI approved funds, tax relief can be claimed for the tax year the fund closes, upon receipt of the EIS5 certificate, which may take up to 24 months.

The maximum investment is £1 million per tax year or £2 million for knowledge-intensive investments, with the option to carry back excess investments for tax relief purposes. Minimum investment amounts vary but are typically around £10,000.

EIS investors can elect to treat shares acquired in one tax year as though they were acquired in the previous year, allowing them to offset tax relief against income tax from that year.

EIS returns primarily come from capital growth rather than dividends, with target returns varying widely depending on the investment. However, higher targets generally indicate higher risks.

EIS fees vary, with managed portfolios typically charging initial and annual fees, as well as potentially a performance fee. It’s essential to review fee structures carefully.

It is very easy to make an EIS investment on the GrowthInvest platform.  Speak to your adviser or visit our offers page.  Here you will find an offer for almost every single fund available in the market.  Go ahead and read our offer page and learn about the differences in strategy of the various managers.  When you decide what to invest in, contact your adviser or simply click the Invest button on the offer, you and you adviser will receive a digital application form to start the process.

EIS investment are long term and your funds are committed until the fund manager delivers exits on the portfolio.  This can take from five to ten years in some cases.  During that time you will not be able to access or liquidate your investment.  EIS fund managers have various exit strategies on their funds, but all source exits on portfolio companies via a mixture of trade sales, management buyouts of refinancing.

This service, offered by HMRC, confirms that a company’s proposed share issue would qualify for EIS tax relief based on provided information. It doesn’t guarantee qualification, which is confirmed after shares are issued.

EIS investments are suitable for experienced or wealthy investors seeking growth opportunities, particularly those with large income tax bills or capital gains tax liabilities.  Speak to your adviser to see if you are deemed suitable for these types of investments.

Like all investments, EIS carries risks, including the potential for loss of capital, lack of liquidity, and failure to meet qualifying criteria, which could result in the loss of tax benefits. EIS investments are long-term and not suitable for everyone.

While both invest in similar companies, VCTs and EIS differ in tax reliefs, investment limits, liquidity, and dividend structures, among other factors. VCTs offer tax-free dividends and greater liquidity but lack certain tax benefits and flexibility compared to EIS.

Private Equity Investments

Private Equity involves investing in the equity of non-publicly traded companies through funds managed by a General Partner (GP) on behalf of Limited Partners (LPs).

Private Equity funds focus on four main strategies: venture capital, growth equity, distressed investing, and buyouts, each targeting companies at different stages of maturity.

Private Equity provides access to unique investment opportunities not available in public markets and offers operational influence through close collaboration with portfolio companies.

Private Equity adds value by capturing private ownership-generated value and offering operational influence, allowing for significant impact on portfolio companies’ growth and efficiency.

Private Equity has historically outperformed public equity markets over various time horizons, showcasing attractive returns driven by growth, resilience, agility, and innovation.

Originally emerging from venture capital in the 1940s, Private Equity has played a crucial role in financing innovation and supporting global economic growth. It has evolved to include diverse strategies and sectors.

Private Equity managers work closely with portfolio companies, providing expertise in various areas such as business scaling and technology integration to drive growth and efficiency.

Investors can start by researching Private Equity funds on the GrowthInvest platform, understanding their investment strategies, historical performance, and potential risks. Consulting with a financial advisor is recommended for personalised advice.

It is simple to make an investment in a PE fund through the GrowthInvest platform.  Speak to your adviser or visit our offers page.  Here you will find an offer for numerous well established Private Equity fund.  You can read our offer page and learn about the differences in strategy of the various managers.  When you decide what to invest in, contact your adviser or simply click the Invest button on the offer, you and you adviser will receive a digital application form to start the process.

Private Equity investments are generally illiquid, and liquidity events, such as IPOs or sales, provide opportunities for exit. Investors should consider the longer holding periods associated with Private Equity.

Private Equity investments may have complexities, higher thresholds, and considerations of illiquidity. Understanding these nuances is crucial for investors considering this asset class.  You can review the relevant structures on the GrowthInvest platform, or speak to your financial adviser regarding this asset class.

Seed Enterprise Investment Scheme (SEIS)

This scheme, initiated by the government in the 2012/13 tax year, was introduced to complement and build upon the success of the EIS.

The primary objective of the SEIS is to assist smaller, often newer businesses in raising funds and fostering growth. Similar to the EIS, investing in a company that qualifies for SEIS can result in substantial tax breaks.

However, due to the inherently riskier nature of these firms, there are two notable distinctions:

  • The income tax relief offered by SEIS is more generous compared to EIS.
  • Unlike EIS, SEIS does not defer capital gains; instead, it allows investors to halve the capital gains tax owed.

SEIS eligible companies must meet specific criteria: they must be less than three years old, have fewer than 25 employees, possess gross assets of less than £350,000, and cannot receive more than £250,000 in funding through the SEIS.

Similar to EIS, certain companies and sectors are excluded, such as those involved in land, commodities, or shares.

While the list of exclusions is extensive, it still offers ample investment opportunities. In recent years, app development, music, and film production companies have been popular choices for investment.

SEIS investments offer a combination of upfront and ongoing tax reliefs, including:

  • Up to 50% income tax relief
  • Tax-free growth
  • Up to 50% capital gains reinvestment relief
  • Inheritance tax relief
  • Loss relief on exit

It’s important to note that tax rules can change, and the benefits depend on individual circumstances. SEIS tax benefits are contingent on the company maintaining its SEIS status.

Income tax relief can be claimed after shares are allotted and you receive your SEIS3 certificate.

SEIS portfolios typically operate on an evergreen basis, with shares allotted at regular intervals. Single company SEIS offers often have a closing date, which is usually either a predetermined date or when the fundraising target is met. Shares are typically allotted shortly after the offer closes.

The date your shares are allotted, not the date you invest, determines the investment date for tax purposes.

SEIS3 certificates are issued after the allotment, once the SEIS company receives confirmation from HMRC that it has met all requirements.

Once you receive your SEIS3 certificate(s), you can claim the tax relief via your tax return. If you’ve already filed your tax return, you can still claim the relief.

A claim for SEIS tax relief can be submitted up to 5 years after the 31st of January following the tax year in which the shares were issued.

The maximum amount you can invest under SEIS is £200,000 per tax year. The minimum investment will vary depending on the fund, but it’s typically around £10,000. Additionally, a ‘carry back’ facility is available.

SEIS investments offer a “carry back” facility, allowing investors to treat shares acquired in one tax year as though they were acquired in the previous tax year. This provides the option to offset the tax relief against income tax from the previous year.

However, this can only be done if you have sufficient SEIS allowance in the tax year to which you’re carrying back.

Similar to EIS, returns from SEIS investments primarily come in the form of capital growth rather than dividends. Target returns vary widely among offers, typically ranging from around 1.3x to over 10x the initial investment. Higher target returns often indicate higher risks.

SEIS fees vary considerably, so it’s crucial to carefully review the fee structure of each SEIS offer document. While individual SEIS companies may not impose explicit charges, administrative and other fees may be deducted as part of business operations. Managed portfolios of SEIS investments usually levy an initial fee of 5-6% and annual fees of 2%, along with a potential performance fee.

It is very easy to make an SEIS investment on the GrowthInvest platform.  Speak to your adviser or visit our offers page.  Here you will find an offer for almost every single SEIS fund available in the market.  Go ahead and read our offer page and learn about the differences in strategy of the various managers.  When you decide what to invest in, contact your adviser or simply click the Invest button on the offer, you and you adviser will receive a digital application form to start the process.

As SEIS shares are not traded on the stock market, they cannot be sold in the same way as investment trusts. Instead, it’s the manager’s responsibility to devise an exit strategy that allows for the return of capital and any tax-free growth to investors.

The manager typically outlines the targeted exit strategy and timeframe, usually around four years, at the outset. However, there are no guarantees and it is quite possible that it could take up to ten years to exit some companies.

SEIS Advance Assurance is a service provided by HMRC, which companies planning to raise money under SEIS may choose to utilize. Although not mandatory, it can offer reassurance.

Receiving Advance Assurance means the company has obtained a letter from HMRC confirming that its proposed share issue would qualify for SEIS tax relief based on the provided information.

However, it’s important to note that Advance Assurance does not guarantee that the company will qualify for SEIS tax relief. This can only be confirmed after the shares are issued.

Regardless of whether the company has received Advance Assurance, it must submit a compliance statement to HMRC after issuing the shares. If all requirements are satisfied, HMRC will confirm the company’s authorization to issue SEIS certificates.

SEIS investments are suitable for experienced or wealthy investors seeking growth opportunities, particularly those with large income tax bills or capital gains tax liabilities.  Speak to your adviser to see if you are deemed suitable for these types of investments.

Both the value and income from investments can fluctuate, potentially resulting in a loss of invested capital.

With SEIS investments, the risk is amplified due to their focus on very small companies. These enterprises are inherently more volatile and prone to failure compared to larger counterparts, meaning investors could potentially lose their entire investment.

As a result, SEIS investments are designed for long-term commitments and may not be suitable for everyone. They are tailored for high-net-worth individuals or sophisticated investors who can tolerate the possibility of a total loss and do not require immediate liquidity.

Furthermore, SEIS investments lack a recognized market for shares, making them less liquid compared to other stock market investments. Selling SEIS shares can be challenging, adding another layer of complexity.

Additionally, to retain all available tax reliefs, investors must hold their investments for a minimum of three years, and the companies must maintain their qualifying status. Failure to meet these criteria could result in the repayment of previously received income tax relief.

It’s important to note that tax laws and product regulations mentioned here are current but subject to change in the future. The benefits of SEIS investments depend on individual circumstances.

Although SEIS, VCTs, and EIS investments target similar types of companies, there are significant disparities among them.

Firstly, variations exist in the tax reliefs offered, maximum investment limits, and minimum holding periods.

Unlike EIS and SEIS, VCTs do not provide a carry back facility. Tax relief from VCTs can only offset the income of the same year in which shares are allotted. Moreover, VCTs do not offer inheritance tax advantages, nor can losses be offset against capital gains from other sources.

Secondly, investing in a VCT involves acquiring shares in the trust rather than the underlying companies. This theoretically allows for the sale of shares at any time, although restrictions may apply.

In contrast, investments in EIS or SEIS funds entail acquiring shares in the underlying companies, which are typically not listed on the stock market. Realizing returns from these investments usually requires an exit event, such as a sale, listing, or refinancing of the company.

Thirdly, unlike EIS investments, VCTs often distribute tax-free dividends, which contribute significantly to investor returns.

SEIS, specifically, focuses on smaller and younger companies, offering greater tax reliefs to compensate for the heightened risks involved.

Venture Capital Trusts (VCTs)

A Venture Capital Trust (VCT) is similar to an investment trust, listed on the London Stock Exchange, investing in young, innovative companies seeking additional funding for business development.

VCTs mostly invest in small, entrepreneurial businesses in various sectors, providing an additional angle for portfolio diversification.

Generalist VCTs invest in a wide range of small, unquoted companies. AIM VCTs focus on new shares issued by AIM-quoted companies. Specialist VCTs concentrate on one sector, like media or healthcare.

The maximum amount is £200,000 per tax year, with a minimum investment varying depending on the VCT.

By investing in a VCT you are able to benefit from up to 30% upfront income tax relief.  Thereafter you will receive tax-free dividends and tax-free growth should the VCT deliver a capital return as well.

VCTs focus on small, often early-stage companies, which naturally carry higher risks.  Many of these portfolio companies may be unquoted and therefore illiquid and difficult to value. The VCT manager tends to be heavily diversified to mitigate these risks, some portfolio companies mail fail and some may deliver big returns.  There is always an additional risk that the tax relief on these products may be withdrawn, however the scheme is very important in delivering much needed capital to the companies that are growing our economy, and with that the government (along with all parties) are very supportive of such schemes.

Historically it was difficult to sell shares in VCTs. But fortunately GrowthInvest has changed that, with our VCT service and Rolling VCT program. If you want to sell your VCT’s please tell your adviser or contact a member of our client services team. They can guide you on when there will next be buy side liquidity in the market, and assist you in making the sale. Proceeds will simply flow back onto the platform, then you can easily invest in new VCT’s or withdraw the funds if you need to. View our VCT Case Study to find out more.

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