How to Invest in Enterprise Investment Scheme? – Investors Guide to EIS

Investors Guide to EIS

Table Of Content 

  • What is EIS?
  • What are the tax benefits of EIS?
  • EIS Investment Amount
  • EIS Returns
  • Conclusion

 

  1. What is EIS?

The Enterprise Investors Scheme (EIS) is a set of UK tax reliefs that were introduced in 1994, replacing the Business Expansion Scheme. The EIS is designed to encourage investment in small, unlisted companies that are carrying out a qualifying trade in the UK.

  1. What are the tax benefits of EIS?

EIS is a great way for your company to raise money and grow your business. It offers tax relief to individual investors who buy new shares in your company, which can amount to £5 million each year, and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes. In order to be eligible for EIS, your company must receive investment under a venture capital scheme within 7 years of its first commercial sale.

  1. EIS Investment Amount

Under EIS, you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes.

  1. EIS Returns

You must follow the scheme rules so that your investors can claim and keep EIS tax reliefs relating to their shares. Tax reliefs will be withheld or withdrawn from your investors if you do not follow the rules for at least 3 years after the investment is made.

Invest in UK Businesses and Receive a Dividend: Investing in a private UK company through an Enterprise Investment Scheme (EIS) gives you the chance to take advantage of the following opportunities:

– You have the chance to realize loss relief and capital gains tax relief.

– You can benefit from tax-free dividends.

– You get to diversify your portfolio.

– You can invest in a company at its most critical stage of development – the start-up phase.

Company Website: www.newcapitallink.com

 

Conclusion:

The EIS offers a safety net for investors by limiting their potential losses, making it easier for them to take risks in order to potentially improve their wealth. The scheme also offers high growth and rewards, making it an attractive investment opportunity.

The purpose of this article is to provide a brief overview of the scheme, along with the basics of how it works, the criteria that you need to meet and the tax benefits that investors can receive.

If you would like more information about EIS or would like to discuss how it could work for your business,

please don’t hesitate to contact us anytime at +44 333 772 62 45

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Rachel Buscall

Co-Founder & Managing Director at New Capital Link.

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