A brand new survey by tax environment friendly funding supervisor means that monetary advisers utilise Enterprise Funding Scheme (“EIS”) funding alternatives greater than Enterprise Capital Trusts (“VCTs”) .

When requested whether or not they have a tendency to make use of EIS funds or VCTs extra typically, one in ten prompt they solely use EIS. That is in comparison with simply 2% of respondents who use VCTs completely.

Almost a 3rd use each EIS and VCT equally, with an additional 26% stating that they use EIS ‘predominantly,’ however do additionally utilise VCTs when acceptable.

82% of advisers additionally state that pace of deployment is a ‘essential’ issue when deciding on an EIS supervisor, with the opposite 18% suggesting that this be a ‘pretty necessary’ criterion.

The EIS is a Authorities scheme that gives a variety of tax reliefs for buyers who subscribe for qualifying shares in qualifying firms, together with earnings tax aid, capital features tax deferral, CGT-free development, inheritance tax mitigation and share loss aid.

VCTs are just like funding trusts and are managed by fund managers, with buyers subscribing for shares in a VCT, which then onward invests in qualifying buying and selling firms, with tax reliefs together with earnings tax aid, CGT-free development and tax free dividends.

Andrew Aldridge, Accomplice at Deepbridge Capital and Board Member of The Enterprise Funding Scheme Affiliation (EISA), commented: “Given final yr’s file fundraising by VCTs, you’ll be forgiven for pondering that they’re the first tax environment friendly funding planning software utilized by monetary advisers, however this survey suggests in any other case.

“It’s reassuring to know that the Enterprise Funding Scheme continues to be a key software for advisers when tax planning and in search of long-term development alternatives. Given the present macroeconomic local weather, EIS has by no means been extra necessary for buyers, advisers and, critically, the growth-focused early-stage firms for whom EIS funding is invaluable.”

Kam Pooni, CEO at Glyconics, which has obtained EIS funding added; “The Enterprise Funding Scheme is globally envied, and offers UK based mostly innovators with important funding that may be transformational. This has been the case for us at Glyconics as we search to revolutionise the medical diagnostics and biomarker evaluation industries, by taking our spectacular R&D outcomes into the business enviornment.”

Michael White, Managing Director at Capital Wealth Companions, concluded; “Each EIS and VCTs present monetary advisers with implausible tax planning instruments, while additionally encouraging buyers to again early-stage unlisted shares, which might present important long-term development. Inside a diversified and balanced portfolio, all monetary advisers ought to be contemplating EIS investments for acceptable shoppers.”