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WARNING: Taxman After EIS Investors - Investors And Entrepreneurs Watch Out! The Taxman May Just Be After You…


04/02/2011

Real Risk of a Tax Epidemic!
Get vaccinated or risk the consequences!

By Modwenna Rees-Mogg, AngelNews

Have you ever looked in detail at all the rules surrounding EIS (Enterprise Investment Scheme) investing? Just to give you a bit of a fright, try looking at the Index Venture Capital Schemes Manual on the HMRC website - You will quickly see that there are over 100 web pages devoted to the different rules and regulations. In fact there are 54 pages devoted to EIS deferral relief: shares issued on or after 6 April 1998 alone!

Understanding EIS in depth is not a job for the fainthearted....

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... From time to time I get emails or calls from investors especially about different aspects of EIS. More often than not the best thing I can do is to refer the enquirer onto someone who knows better than I what the answer might be as I am no expert on the detail of the subject. It seems a good time to write about the issue given what I learnt from my friends at Crowe Clark Whitehill the other day.

EIS is an interesting beast. Even in the doom of 2008/9, £500m odd was invested under the Scheme and in good years this can rise to £700m+. And the number of companies backed under the Scheme each year is typically over 1,000 with 20,000-30,000 individual subscriptions being made. To my mind that is an awful lot of people who probably should, but most likely don’t, know the minutiae of the rules and the risks they are facing about their claims. Add to that the time that individuals are involved in an EIS investment. You have to hold shares under EIS for three years to guarantee that you will get the relief. That ‘s 36... continued on page two >

 

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