The shares of unquoted companies can also fall or rise in value more sharply than shares in larger, more established companies.
A number of EIS tax reliefs depend on companies maintaining their EIS-qualifying status for at least three years. It is possible that a company might cease to be EIS-qualifying and EIS reliefs previously granted would need to be paid back.
HMRC could change existing tax legislation. Tax treatment also depends on personal circumstances.
Where to learn more
It takes skill and experience to invest in early-stage companies, as these businesses are more difficult to research and access. It’s also more likely that a small, less established business will fail.
For these reasons, many clients choose to access smaller company investments through a specialist investment manager. This way, a client benefits from the manager’s expertise, track record and pipeline of investments.
Octopus is synonymous with smaller company investing. We’ve been making these investments for more than two decades and in that time have invested more than £2 billion in early-stage companies and helped to nurture early-stage companies by providing practical and strategic support so they can reach their full potential.
We have an ideal next step where you can learn a little more about early-stage investing.
You’ll be able to watch a short interview with an adviser on why he likes early-stage investments for his clients. You’ll also read about the four key reasons why advisers should consider recommending early-stage investments and learn more about the tax-efficient investments which offer access to opportunities like Imophoron.
Visit octopusinvestments.com/smaller_companies
For professional advisers and paraplanners only. Not to be relied upon by retail investors.
Imophoron is an example company which has been included for illustrative purposes only and is not an investment recommendation. EIS investments are not suitable for everyone. Any recommendation should be based on a holistic review of your client's financial situation, objectives and needs. This article does not constitute advice on investments, legal matters, taxation or any other matters.
Issued by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 03942880. Issued: January 2022. CAM011693.
