EIS Taxation
Lacomp EIS Funds are “Approved” by the Inland Revenue. An Approved Fund must invest monies raised within twelve months of the Fund's closing date. Conversely, an Unapproved Fund can take as long as three years to complete its investments.
Whilst the 20% EIS tax relief can be claimed in the tax year during which the Fund closes, CGT deferral relief is granted at the date the Fund Manager invests in an EIS qualifying company. Therefore, when investing in an Unapproved Fund, this important tax benefit is very difficult to plan for and could easily prove unworkable in practice.
The tax breaks associated with income tax, capital gains tax, inheritance tax and loss relief for EIS investments are described in more detail in this section. In addition, during the period a Fund is open for investment, details about EIS taxation can be found on pages 10 to 13 of the Lacomp British Enterprise EIS Funds brochure.
Income tax relief apart, an EIS investment is demonstrably more tax efficient - CGT deferral, Loss Relief and IHT effective - than a VCT investment.
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