The Enterprise Investment Scheme Association (EISA) has published a guide to help advisers understand changes to rules governing tax-efficient vehicles.
The move has been prompted by plans announced in the 2017 Autumn Budget, which Eisa said could attract more investors.
The free guide explains the background to the changes and why capital preservation schemes will no longer be able to take advantage of the generous benefits associated with the EIS.
The 'EIS: new landscape, new opportunities' guide highlights the enhanced terms – including the doubling of the amount that can be invested by individuals through the EIS – from £1m to £2m.
There has also been an increase in the total amount that can be invested in what are known as 'knowledge-intensive' companies – from £5m to £10m.
Mark Brownridge, director general of EISA, the trade body for the industry, said: “A detailed survey we conducted with advisers in the wake of the Budget announcement showed that half expect to see more investor interest now.”
Additionally, many advisers who have never used EIS products before are recognising that they will be challenged to discuss the options with clients in the months and years ahead, the association added.
Chris Daem, a director at Cervello Planning, said: "Considering the tax benefits of EISs, they are certainly worth bearing in mind due to their tax savings for clients. However, while appropriate, there are factors which mean that an EIS remains an ancillary tool to support the right clients as opposed to a mainstay of our recommendations.
“The main factor is the level of risk you take when investing in enterprise companies, as EIS and SEIS (Seed Enterprise Investment Scheme) investments are typically higher risk than conventional investments.”
Data from HM Revenue & Customs (HMRC) shows that more than £16bn has been invested under the EIS scheme since it launched in 1994.
Donna Harding, marketing manager at guide sponsor Blackfinch, said: “We see the commitment to double investment allowances as a positive signal that the chancellor recognises the important role EIS has to play in supporting the growth of the British economy.
“Investors now know EIS is open for business and the industry has been given very clear guidance about what will be acceptable in the future.”
