Welcome to Enterprise Tax Solutions Enterprise Tax Solutions – Championing the Ongoing Challenges The Pastor says ‘register today and receive 12 must know facts and tips about …
Helping you to make informed choices
We follow a simple formula.
We only introduce clients to schemes that meet our criteria. All the schemes we have introduced to have been successful so far.
We can help you understand the options available so you can make informed choices about your investments.
The Basis of The Enterprise Investment Scheme
Government Support to Grow the Economy
The British Taxation System is, amongst other things, designed to grow the economy and encourage speculation: Effectively if you win big, the government wants their slice, but if you lose, there is some sort of safety net. Overtime governments eroded these policies and offered incentives and benefits based on non-probable events – CGT is an example – yes you can offset your losses against your gains yearly, but in a cyclical economy all my gains come in 14 years and all my losses in 4 so it’s not much use.
However, with the Enterprise Investment Scheme, this symbiotic relationship is back and it works like this:
i. Help Finance Our Young Companies, bring growth and jobs to our nation and we’ll give you some tax back, some tax incentives and some degree of loss protection.
ii. If you win, your gains will be tax free, if you lose we will provide a relativelysoft landing.
The 6 benefits to the EIS
2 for your existing tax liabilities, 2 tax incentives for the investment itself and 2 loss relief protections.
a. Two are based on taxes that you have paid or owed. These are:
i. 30% Income Tax Rebate on the invested amount – yes, you get a 30% rebate from HMRC!
ii. Capital Gains Tax Deferral on Existing Liabilities – yes, CGT that you owe can be sheltered!
b. Two are based on the actual investment. These are:
i. 0% Capital Gains Liability on Exit – yes if you make a ton of money on your EIS Investment you don’t have any CGT to pay
ii. 0% Inheritance Tax Liability – yes, a bitter sweet benefit here, but if you die
while holding EIS investments, these can be passed to your wife / husband / offspring without IHT (inheritance tax) being levied
c. Two provide a parachute if things go wrong. These are:
i. Loss Relief at your marginal rate – yes, if everything goes wrong you can offset your capital losses against your income tax at your marginal rate. If you pay 45%, with the 30% income tax you have already had you can claim back an additional 45% (your marginal tax rate) * 70% (your remaining loss) = 31.5%. This means of your 100% you’re down: 100% – 30% – 31.5% = 38.5%
ii. Offset Losses Further against Capital Gains Tax – yes, if you have CGT that you sheltered coming into the EIS or if you have CGT to pay, you can offset the remaining loss of 31.5% as above.