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Guide to Enterprise Investment Schemes



    EIS allows companies to raise finance from investors who purchase new unquoted shares in those firms and who benefit from a range of tax relief incentives.

    In the 2012 to 2013 tax year, more than £1bn was invested into EIS qualifying companies. This brought the total amount of investment into UK smaller companies through EIS to more than £9.7bn since the scheme was first introduced in 1994.

    This guide will explain who should consider EIS, the tax benefits, the risks presented by this type of investment and how to ensure you select the best vehicle for your clients.

    Supporting material was provided by Daniel Kiernan, director of alternative investment research provider Intelligent Partnership; Mark Payton, managing director of Mercia Fund Management; Paul Sedgwick, head of investments at Frank Investments; John Thorpe, business line manager for EIS at Octopus Investments; Susan McDonald, executive chairman and joint founder of Calculus Capital; and Jonathan Gain, chief executive of Stellar Asset Management.

    In this guide


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. How many employees can a small company that qualifies for EIS investment have?

    2. How long must shares be held for if income tax relief is to be received?

    3. How long do shares have to be held for in order to get inheritance tax relief?

    4. What do advisers need to check about EIS, according to Mr Kiernan?

    5. How much of a balanced portfolio could be allocated to EIS, according to Mr Kiernan?

    6. What is the maximum a higher rate tax payer could lose if their EIS investment reduced to zero, according to Mr Gain?

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