EIS & VCT

Question 1

What is an EIS

Answer 1

An EIS is a higher-risk product intended to encourage private investment into small individual businesses that need to raise capital to grow. Investors receive a range of tax reliefs and benefits in return for the higher risk.

Question 2

Tax Benefits

Answer 2

Income tax relief of 30% (lost if not held for 3 years)

No capital gains tax on disposal (from 3 years)

Existing capital gains can be deferred

Potentially Inheritance Tax free (limited to £1m of relieved assets per individual), or subject to a 20% IHT rate

Killik EIS panel
Molten Ventures
Parkwalk Opportunities
MMC Ventures.

Question 3

What is a VCT

Answer 3

A VCT is a higher-risk product intended to encourage private investment into innovative UK businesses that need to raise capital to grow. Investors receive a range of tax reliefs and benefits in return for the higher risk.

Question 4

Tax benefits of VCT

Answer 4

The tax benefits of an VCT include:

Income tax relief of 30% (lost if not held for 5 years)

No capital gains tax on disposal (from 5 years)

Dividends are tax-free