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Enterprise Investment Scheme |
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Enterprise Investment SchemeThe Enterprise Investment Scheme is a UK tax incentive scheme designed to encourage investors to invest in unquoted companies. The benefits are:Income tax relief at 20%: so if you invest £10,000, the taxman gives you £2,000 back.CGT relief: provided you hold your investment for five years, any gains subsequently made are free of capital gains tax.Tax relief on losses: if your EIS investment is a disaster, you can set the losses off against gains made in the tax year in which you incur losses.Rollover relief: if you use the proceeds from selling shares in Company A to invest in Company B, and Company B is an EIS-qualifying company, you won't have to pay tax on the gains made from Company A until you subsequently dispose of Company B's shares. i.e. your gain is rolled over.The maximum amount you can invest in an EIS is £150,000 annually. Similar tax breaks are available from investments in Venture Capital Trusts (VCTs). Essentially, these are investment trusts that invest in small unquoted companies. As with EIS investments, there are lots of rules which, if broken, will invalidate the tax advantages.The risks associated with EIS companies are high and you should take professional advice before committing funds to them.Similar MatchesGovernment sponsored enterprisesGovernment sponsored enterprisesPrivately owned, publicly chartered entities, such as the Student Loan Marketing Association, created by Congress to reduce the cost of capital for certain borrowing sectors of the economy including farmers, homeowners, and students. Enterprise zone trustEnterprise zone trustA property trust which invests in enterprise zones. Free enterpriseFree enterpriseA system in which economic agents are free to own property and engage in commercial transactions. See laissez faire, economic freedom, . State trading enterpriseState trading enterpriseAn entity of government that is responsible for exporting and/or importing specified products. See marketing board. Enterprise zoneEnterprise zoneA region in which businesses get special tax advantages (including exemption from business rates) as an incentive to set up business there. Designation normally lasts for 10 years. Further Suggestionsenterprise valueEnterprise Multinational enterprise State-owned enterprise |
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