Wealth planning

Enterprise Investment Schemes and Venture Capital Trusts

James explains Enterprise Investment Schemes (EISs), Venture Capital Trusts (VCTs) and the differences between them.

11/01/2017

James Gladstone

James Gladstone

Head of Wealth Planning

Both EIS and VCTs are part of the UK tax system designed to encourage private individuals, through attractive tax reliefs, to invest in small, higher-risk companies. These investments enable individuals to participate in UK businesses at various stages of development, benefiting from any growth they achieve and potentially aiding the diversification of a portfolio.

An EIS is designed to help small companies not listed on the London Stock Exchange, to raise finance by offering a range of tax reliefs to investors who purchase new shares in these companies.

VCT’s often spread the investment risk over a number of companies. They encourage investments into small and medium sized companies – many are unlisted, however those that are listed are likely to be listed on the Alternative Investment Market (AIM) which is a sub-market of the London Stock Exchange.

What are Enterprise Investment Schemes?


What are Venture Capital Trusts?


What are the differences?

 

VCT

EIS

Annual investment limit

£200,000

£1,000,000

Income tax relief

30%

30%

Option to defer capital gains

No

Yes

Business property relief

No

Yes –  if held for 2 years

Tax free dividends

Yes

No

Minimum holding period

5 years

3 years


How can we help you?

Our wealth planners will be able to discuss with you the different levels of forecasted target returns and associated risks across our current preferred EIS and VCT offerings. For more information please email me at james@cazenovecapital.com.

 

These animations are for information purposes only. Nothing should be deemed to constitute the provision of financial, investment or other professional advice in any way.

VCTs and EIS are higher risk investments, past performance is not a guide to future performance. The value of investments and the income received from them can fall as well as rise. Investors may not get back the amount invested.

Statements concerning taxation are based on our understanding of the taxation law in force at the time of publication. The levels and bases of taxation may change. You should obtain professional advice on taxation where appropriate before proceeding with any investment.

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 12 Moorgate, London, EC2R 6DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

Contact Cazenove Capital

To discuss your wealth management requirements, or to find out more about our services and how we can help you, please contact:

John Gordon

John Gordon

Business Development Director
Telephone:
john@cazenovecapital.com
James Gladstone

James Gladstone

Head of Wealth Planning
Telephone:
james@cazenovecapital.com