THE ENTERPRISE INVESTMENT SCHEME
THE INFORMATION HERE IS NOT COMPREHENSIVE. PLEASE GET PROFESSIONAL FINANCIAL ADVICE BEFORE COMMITTING TO ANY KIND OF INVESTMENT.
YOU CAN CLICK HERE FOR EIS INFO ON THE GOVERNMENT’S WEBSITE
The Government’s Enterprise Investment Scheme is designed to encourage investment in high-risk enterprises. The current activity of Sillwood Films Ltd has qualified for EIS. This is good news for UK taxpayers who invest £500 or more in the company: 20% relief on initial investment against income tax (every £500 invested actually costs £400), plus exemption from Capital Gains Tax and loss relief against income or gains. Please read the highlights and ‘the small print’ below.
- * If you are a UK taxpayer, you can claim 20% income tax relief on your initial investment. Relief under EIS is given by way of a reduction in the income tax otherwise payable.
- * There’s no Capital Gains Tax to pay when you dispose of your shares after 3 years.
- * If you make a loss when you dispose of your shares, you can claim loss relief against your income or against your capital gains (adjusted for the tax relief you’ve already had).
- * Depending on the timing of your investment, you can elect for up to half of it (with an upper limit) to be treated as made in the previous tax year.
- * After 2 years, EIS shares attract business property relief for inheritance tax.
- * You can defer paying Capital Gains Tax (up to 40%) due on the disposal of any asset, by buying EIS shares in the period from 1 year before to 3 years after the Gain crystallises.
THE SMALL PRINT
- * EIS is only available to UK taxpayers.
- * Shares in EIS are longer-term investments. The tax relief will be withdrawn if you don’t hold the EIS shares for 3 years or more.
- * EIS shares are high-risk investments. They can fall in value, or rise.
- * You can only claim EIS tax relief if you invest a minimum of £500, and in lump sums.
- * There are upper limits on how much you can invest.
- * You can only sell your EIS shares if there’s a buyer for them at arm’s length. If the shares are sold within 3 years or the transaction is not at arm’s length the tax relief given will be withdrawn.
- * The amount of tax relief you get can’t be greater than your income tax bill in the investment year.
- * People with a controlling interest in the company, the Director and his close relatives are not eligible for EIS.
- * If Sillwood Films Ltd stops qualifying for EIS within 3 years of first trading or issuing shares, or is wound up or dissolved for non bona fide commercial reasons or for the purpose of tax avoidance, then EIS tax relief may be withdrawn.
SILLWOOD FILMS – BEHIND THE SCENES
Company law & share administration:
Providence House, Providence Place, London N1 0NT
EIS & corporate accountancy:
DEREK ROTHERA & COMPANY
Units 15 & 16, 7 Wenlock Road,
London N1 7SL