If you have a high attitude to risk and a high-income tax bill, VCT and EISs may be appropriate for you given their significant tax benefits!

Venture Capital Trusts (VCTs) and Enterprise Investment Schemes (EIS) are complex tax planning products designed to encourage investments in smaller early-stage companies. They are considered high risk but offer generous tax benefits. Income tax relief – You can claim up to 30% upfront income tax relief on the amount you invest, provided you keep your VCT shares for at least five years. An EIS gives 30% tax relief on investments up to £2 million and CGT gains from other investments can be deferred. These are specialist complex products which are more suitable for experienced investors and certainly will not be appropriate for all investors. The table below summarizes some of the main features at a high level. 

*£2m limit only applies if anything above £1 million is invested in knowledge-intensive companies.

If you would like to discuss whether EIS or VCT investments may be appropriate for you, please contact Mike Gibbs at [email protected].

Note, the above table is a high-level summary and there are specific detailed conditions in relation to these products that need to be satisfied to receive the benefits. (e.g. CGT deferral or 1 carryback.) Venture Capital Trusts (VCT) and Enterprise Investment Schemes (EIS) invest in assets that are high risk and can be difficult to sell such as shares in unlisted companies. The value of the investment and the income from it can fall as well as rise and investors may not get back what they origin.

SEIS (Seed Enterprise Investment Schemes), have similar features to EIS, but are higher risk than EIS, given this increased risk they provide 50% income tax relief and an exemption on 50% of any CGT deferrals. Investments are limited to £200k each year.

Regulatory Notes

Oasis Wealth Management Ltd is an appointed representative of Quilter Financial Services Limited and Quilter Mortgage Planning Limited which are authorized and regulated by the Financial Conduct Authority. 

Oasis Accounting is regulated by ICEAW.

Both Accountants and Financial Advisers are qualified to advise on UK Tax, but only Financial Advisers can advise on Investments

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.

Approver Quilter Financial Services Limited and Quilter Mortgage Planning Limited 16/02/2024.