How you can benefit?
Further information on the EIS is to be found here. However, a summary of the key tax incentives are set out below.
Eligible Investors should be able to benefit from various EIS tax reliefs as follows:
Eligible Investors should be able to benefit from various EIS tax reliefs as follows:
How much tax therefore can I potencially save/defer when I invest?
Eligible Investors may therefore be able to combine the above reliefs so as to achieve initial reliefs of 60p in the £1.
Examples (ii) and (iii) are calculated on the assumption that you would otherwise pay tax at 40% on the chargeable gain.
Eligible Investors may therefore be able to combine the above reliefs so as to achieve initial reliefs of 60p in the £1.
Examples (ii) and (iii) are calculated on the assumption that you would otherwise pay tax at 40% on the chargeable gain.
What would happen if I were to sell my shares after 3 years at a profit?
You will not have to pay any tax at all on any profits made from the sale of your Shares if you sell them after three years.
The tables below demonstrate the percentage returns that an Investor would receive if his/her Shares were sold at £2.40 per share compared to the original purchase price of £1 per share.
The tables below demonstrate the percentage returns that an Investor would receive if his/her Shares were sold at £2.40 per share compared to the original purchase price of £1 per share.
The example given in table (a) assumes only income tax relief at 20% has been applied.
The example given in table (b) assumes both CGT deferral at 40% and income tax relief at 20% have been applied.
The example given in table (b) assumes both CGT deferral at 40% and income tax relief at 20% have been applied.
What would happen if I were to lose money?
If your Shares are disposed of at a loss (to the subscription price) the allowable loss for capital gains tax purposes is calculated by reducing that loss by the amount of the EIS income tax relief. The reduced loss can be set against gains or by election against your income.