EIS Relief

We have talked elsewhere on this site about EIS relief and the potential benefits that can be gained from The Enterprise Investment Scheme and its EIS relief opportunities.

To put some real figures to anEIS relief actual example of EIS Tax Relief Incentives may make the whole green investing scheme a little easier to follow. There are EIS downloads available from The Pastor elsewhere on the website along with our forum for all things tax relief and tax related projects including tax efficient investments.

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People can invest up to £1,000,000 in any tax year and receive 30% tax relief. However, they are locked into the scheme for a minimum of three years. EIS seeks to encourage investment into unlisted companies, just like the ones featured here www.350ppm.co.uk/investor-centre

 

 

Assuming high rate tax bracket and a £10,000 investment for easy figures:

Example 1 – Investment Doubles In Value – Shares Held For 3 Years

Investment of £10,000

Tax Relief £3,000

Capital Gains Tax £ Zero

Gains: £13,000 – £10,000 profit + £3000 Income Tax Relief Relief

Example 2 – Investment Value Remains Static

Investment of £10,000

Tax Relief £3,000

Share Sales £10,000

Gains:  £3000 [Income Tax Relief Relief]

Example 3 – Company Closes – Shares Have Zero Value

Investment = £10,000

Income Tax relief = £3,000 (as a reduction in your income tax bill)

At risk capital = £7,000

Loss relief on at risk capital @ 45% = £3,150

Your actual loss = £3,850    (£10,000 – [£3,000 + £3,150])

Clearly the EIS relief is highly attractive.

 

There is no minimum amount an investor can invest in any company (prior to 2012/13 this was £500); however there is a maximum investment of up to £1 million from 2012/13 (£500,000 2008/09 – 2011/12).EIS Relief

 

NOTE:
Availability of any tax relief, including EIS relief and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

Please visit the HMRC website for further information on EIS relief. More about EIS Scheme Here

 

Our resident Tax Pastor has a free to download ‘all you need to know about eis relief and EIS Investment’ HERE  Click to download, to join our forum and to receive regular insider information relating to tax relief projects and The Enterprise Investment Scheme.

EIS Relief