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ANDY ENGLAND and JEREMY RAYMENT explain why advisers should recommend the EIS to investment-hungry entrepreneurs
KEY POINTS
- The importance of the EIS as a source of business funds.
- Forthcoming increased availability of the EIS reliefs.
- Advance clearance from HMRC can be obtained.
- ITA 2007 limitations on preferential rights for shares.
- The tax reliefs help to minimise the investors’ risks.
The enterprise investment scheme (EIS) was introduced in 1994 to encourage investment in small and medium-sized businesses and has been pretty successful.
Statistics show that by November 2010 just over £7.5bn of subscriptions had been raised under EIS in the years up to 5 April 2009; and indeed almost £2bn was raised in the last three years alone.
The scheme offers valuable tax breaks for ‘qualifying’ individuals investing in ‘qualifying shares’ in ‘qualifying companies’.
It...
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