The Scheme

The Enterprise Investment Scheme (EIS) was launched by the UK Government in 1993/94 to encourage investors to support smaller higher-risk trading companies to raise capital by offering a range of tax reliefs to investors who purchase shares in those companies.

Since this time over 22,000 individual companies have received investment raising over £12bn (source HMRC Report July 2015).

The Benefits

The main tax benefits available on qualifying investments held for 3 years are:

  • Up to 30% Income Tax relief to a maximum of £300,000 in any one year
  • Capital Gains Tax exemption on any profits
  • Rollover Capital Gains Tax deferral for life of EIS investment
  • Capital Gains Tax loss relief which can offset against income tax
  • Inheritance Tax relief on death (Available after 2 years)

Full details on the incentives available can be found on the Government website here

Qualifying Investments

Companies have to meet certain criteria to qualify for EIS investment funding and all must be unlisted although this does cover qualifying stocks traded on the London AIM market as well as shares in companies which are unquoted.

How It Works

Beaufort’s team of small cap research specialists can identify EIS qualifying companies which we believe will offer investors the opportunity to achieve significant capital growth potential. In some cases our corporate finance team will work with companies within the EIS space and, in addition to raising funds, will be actively involved in advising the management to ensure successful implementation of the company’s strategy to ensure the best possible returns for investors.

By the very nature of the EIS scheme, investments must be treated as speculative and high risk and for this reason Beaufort feel it is of paramount importance for clients to have a dedicated broker who will gain an understanding of your current financial situation and investment objectives. Beaufort’s free Advisory Broking Service allows us to develop the close relationship required to gain this level of understanding and trust and ensure that any EIS investment is both suitable and appropriate.

Current Transactions

Princetown Distillers - New Commercial-Scale Whisky Distillery in Dartmoor on Duchy of Cornwall Land

Dartmoor is an excellent location to make whisky given the high water quality, local barley and peat, clean air and suitable damp climate. Combined with being central to the most touristed region of the UK (the South West) and its Royal association allows for some exceptional brand building and export potential. The global growth trend of craft beer, gin and whisky is powerful and Princetown Distillers is positioned to be a beneficiary.

Princetown Distillers

It is expected to take 18-24 months to build the distillery and own whisky sales could start as early as three years later. Earlier revenue opportunities will come from the Visitor Centre, blended third party whisky sales, advance orders and possibly other related products. The cost of the distillery is forecast to be no more than £4.4m and the current fund raise is expected to finance the first phase of development.

For further information, please contact Graeme Hatch on +44 (0) 207 382 8309 or email graeme.hatch@beaufortsecurities.com.

 

Recent Transactions

October 2016

We successfully closed an EIS-eligible private funding round of over $500,000 for MotionLED Technology Group

MotionLED

MotionLED is a UK-Chinese technology hardware and software company providing world leading Digital Outdoor Advertising solutions focused on the transportation industry. Its current bus-side product (BusLED) claims to be the world’s thinnest, lightest and lowest power consuming LED display for use out of doors in sunlight. The displays are controlled remotely via wireless technologies which allows for real-time advertising and public service announcements which can be displayed based upon time of day and location of the vehicle. This product alone has truly global appeal.

 

Find out more

To find out more information and have a preliminary discussion about our EIS services please contact Graeme Hatch on +44 (0) 207 382 8309 or email graeme.hatch@beaufortsecurities.com.

Risk Warnings

Please note that EIS qualifying companies should be considered as being high-risk investments. They are not suitable for all investors. They may be appropriate as part of a diversified portfolio, giving access to an alternative asset class, but should be considered illiquid and therefore unsuitable for unplanned or early capital withdrawals. You should seek qualified professional advice before investing. You should also remember that the tax benefits may change as they are subject to changes in tax legislation.