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EIS funds offer end of tax year opportunity, says Longbow


Longbow Capital is urging investment advisers seeking end of tax year planning strategies to consider the generous tax benefits and deferral reliefs offered by the Enterprise Investment Scheme.

As one of the few remaining tax perks open to investors, EIS has been classed the “the last great tax break” because of the depth of its tax benefits.

EIS can offer opportunities for investors to mitigate across several different brackets including income tax, inheritance tax and capital gains tax, as well as providing generous CGT deferral relief which permit qualifying investors to carry forward tax liabilities.

Owing to enhancements made in a recent Budget announcement, investors can also carry back to the previous year 20 per cent income tax relief on up to GBP500,000, effectively giving the investor GBP1,000,000 of relief across two years to a maximum of GBP500,000 in each year. 

With minimum investments as low as GBP10,000, EIS can offer a tax-efficient alternative to Individual Savings Accounts.

EIS was launched by the Government in 1994 to encourage private individuals to invest in UK companies focused on enterprise and innovation.

Julian Hickman, partner, Longbow Capital, says: “EIS offers a surprising collection of tax benefits and over a much shorter timeframe than a venture capital trust. It is perhaps not surprising that over the last few years there has been a steady decline in VCT sales and the emergence of EIS in its place.”

Longbow Capital recently announced the launch of the Longbow Approved EIS Fund, a tax-efficient investment vehicle offering investors the opportunity to invest in a portfolio of emerging healthcare, life science and wellbeing companies.

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