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Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more

Read our full Risk Warning

What are the tax benefits of investing in an EIS eligible offer and who can benefit?

Some of our investment offers are eligible for EIS (enterprise investment scheme) tax relief. This government scheme encourages investment in early-stage companies by offering generous tax reliefs to investors, including up to 30% relief against income tax liability, depending on individual circumstances. We’ve written a short explainer on the benefits.

News

 - 17 February 2023

Some of the share offers available through our crowdfunding platform are qualifying Enterprise Investment Scheme (EIS) investments, which offer certain tax advantages.

EIS was introduced to provide an incentive to investing in early-stage companies. By encouraging investment in such companies, the government aims to create more UK jobs in the long term and stimulate the UK economy. Since EIS was launched in 1994 more than 32,000 qualifying early-stage companies have benefitted from £24 billion of investment.

EIS offers a number of generous tax reliefs to investors, alongside the potential investment returns.

EIS tax reliefs include:

  • Upfront income tax relief – investors can claim 30% relief against income tax liability on EIS investments in the tax year the investment is made. This means if someone invests £1,000 in an EIS qualifying company, they can receive a £300 income tax rebate in the year they invest (providing they have paid the amount of income tax they are reclaiming). This can be reclaimed by completing a tax return, and attaching the EIS certificate from the investment.
 
  • Tax-free capital gains – when investors sell EIS shares, any growth in value from an EIS investment is 100% tax-free provided the shares have been held for at least three years.

  • Loss relief – if an investor makes a loss on the sale of their shares in an EIS qualifying company, this loss can be offset against their income tax bill reducing the amount of tax they pay.

  • Inheritance tax exemption – EIS shares qualify for Business Property Relief (BPR). This means they can be left to beneficiaries free from inheritance tax, provided they have been held for at least two years at the time of death.

  • Deferral of existing capital gains tax liabilities – where an investor has incurred a taxable capital gain on another investment, they can be deferred by reinvesting the gain into EIS shares. There is no upper limit on the value of gains that can be deferred.

The tax treatment of EIS shares depends on your individual circumstances and tax rules can change. Tax is a complicated area, so if you are unsure as to which benefits you may qualify for you should consider advice. You should always choose an investment based on whether you believe it is right for your circumstances, and that you are comfortable with the risk..

You can see which investment opportunities are open and eligible for EIS here.
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Investments offered on this platform are not readily realisable, which means that they may be difficult to sell and you may not get back the full amount invested. Investments are not covered by the Financial Services Compensation Scheme (FSCS) and your capital is at risk and returns are not guaranteed. Repayment of capital and interest or payment of dividends will be dependent on the success of the organisation's business model and past performance isn’t a reliable indicator of future performance. You should always read the offer document in full before deciding whether or not to invest as it will cover risks specific to an individual investment. You can read more about the general risks associated with making these types of investments. If you are unsure if any of these investments are right for you, you should contact an Independent Financial Adviser.

Triodos Bank UK Ltd. Registered Office: Deanery Road, Bristol, BS1 5AS. Registered in England and Wales No. 11379025. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 817008.