Income Tax Relief
Introduced in 1995 as a successor to the BES schemes, Enterprise Investment Scheme companies and EIS approved funds (such as the Lacomp British Enterprise EIS Funds) offer extremely attractive tax breaks. Both individuals and Trustees can apply for investment - see the brochure for details.
Individuals (including husbands and wives separately) can each claim 20% income tax relief on the costs of investment in EIS Qualifying Companies (up to £500,000 per annum) against their individual income tax liability for the tax year during which the Fund closes.
If the Closing Date occurs before 6th October in a tax year, income tax relief equal to 20% of one half of the costs of investment in EIS Qualifying Companies (subject to maximum costs of £50,000) may be set against the individual investor's income tax liability for the previous year.
The shares in the EIS Qualifying Companies must be held for at least 3 years. Furthermore, neither the Investor (nor the spouse) must be connected with the Qualifying Company (broadly, as an employee, partner or director or as a shareholder other than through the Fund) either within two years before or three years after the Fund invests in the EIS Qualifying Company. Any breach of these conditions would mean that EIS Relief would not be available.
Example:
| £ | |
|---|---|
| Initial Investment (net of charges) | 50,000 |
| Less Income Tax Relief @ 20% | (10,000) |
| Net Cost of Investment | 40,000 |
