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Focus Groups

Enterprise Investment Scheme – Bloodstock Application

EIS schemes are designed to encourage investment in high-risk commercial companies.

Tax Advantages

EIS is an investment in shares in a qualifying unquoted trading company. Up-front income tax relief at 20% on the net amount invested in qualifying share i.e. a £50,000 investment would receive a £10,000 reduction in his/her personal tax liability. The maximum investment in any one scheme is 30% of the shares in the company or to qualify for income tax relief £200,000 in any income tax year.

Capital Gains Tax deferral in respect of capital gains may also be available. If this investment is held for more than three years the gain will be tax-free. The cost of the investment can be offset against Capital Gains realised within the three-year period.

Any loss ultimately suffered on the cost of the subscription can be claimed as a Loss Relief for Income Tax or Capital Gains Tax purposes.

Normally bloodstock breeding would not qualify, as since 1998 “farming” was an excluded activity. However, if this is carried out without the occupation of land the HM Revenue & Customs may accept this activity as a qualifying trade.

The conditions relating to such schemes are very complicated but anyone looking to set-up such a scheme is advised to contact the Tax department at PEM on 01223 728222.