Enterprise Investment Scheme

Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) was introduced by the government in 1994 to encourage private investment in smaller higher-risk trading companies by offering a range of tax reliefs to investors who purchase new shares in those companies.

The benefits:

Capital Gains Tax Deferral

Deferral of Capital Gains Tax (CGT) of up to 28% of the investment on gains arising in the three years prior to or year following the date of investment, so previous Capital Gains Tax liability can be reclaimed or deferred.

Exemption from Capital Gains Tax on the EIS shareholding if held for a minimum of three years.

Income Tax

Income Tax relief at 30% up to £1m in a tax year for individuals (whatever the investor’s rate of income tax).

Income Tax and Capital Gains Tax combined

Possible combined Income Tax relief and Capital Gains Tax deferrals of up to 58p in the £1, i.e. the effective benefits of investment into an EIS can be up to 58% for investors able to use these benefits.

Inheritance Tax Relief

100% Inheritance Tax (IHT) relief on shares owned for a minimum of two years.

Carry Back

Investors can carry back to the previous tax year, the value of any investment made up to the following 5th April.

Loss relief

Loss relief which can be offset against Income Tax or Capital Gains Tax liabilities for any investment which makes a capital loss – relief is available at the investor’s marginal tax rate. The EIS can mitigate risk by combining the initial tax relief and the loss relief to limit the downside exposure of the amount invested.

Self Invested Personal Pensions (SIPPs)

Self Invested Personal Pensions (SIPPs) can invest and effectively reduce the net cost of the investment to 60% for an individual paying income tax at the 40% higher rate of Income Tax.

Current opportunities:

An opportunity exists for investors to participate in Premiere Films EIS Limited, which has applied for preliminary approval by HMRC as an EIS qualifying film production company which the directors believe has significant growth potential over the next 3 or more years in the film industry. The principal objective is to produce up to 3 commercial films a year over three years which are suitable for theatrical release worldwide. The company will spread risk across its production portfolio by producing a broad cross-section of films in different genres. It intends where possible to be the commissioning producer on all films that it becomes involved with and will seek to mitigate risk such as by cash flowing against the United Kingdom Film Producer Tax Credit, obtaining executive producer fees, securing distribution agreements, as well as using co-production partners, soft money, Government subsidies, deferments and private equity.

Call us now
You can reach us on 01273 766399
Send us an email
on info@premierecapital.co.uk