Is it time to take the plunge?

Dec 18, 2014 | Uncategorized

Inflation is coming down, and the economy appears to be on the way back up …. so, is this the time to consider investing in an upwardly mobile local business?

A Shropshire finance expert is signposting a number of Government-approved investment schemes which are encouraging investment in smaller high risk unquoted trading companies, and now also in social enterprises.

DY’s Tax Adviser, Pam Mason, says: “Various tax reliefs are available to encourage investment, and there are a series of options.

“Four schemes which are worthy of investigation are Enterprise Investment Scheme (EIS), Venture Capital Trust Scheme (VCT), Seed Enterprise Investment Scheme (SEIS), and Social Investment Relief (SIR).

Pam explained: “A qualifying investment of up to £1 million, depending on the scheme, reduces the investor’s tax liability for that year.  In some cases, claims can be made to carry back this relief to the previous year, if you have insufficient tax liability in the current year.

“Income tax relief is 30% of the qualifying investment, except SEIS which is 50%.  The investments must generally be held for three years, except VCT which requires five years.”  

Pam said any capital gain on the disposal of a qualifying investment would generally be exempt.

“There is no minimum ownership requirement for VCT shares to qualify for capital gains tax exemption.

“As ever in these cases, though, everyone’s circumstances are different.  So, while this may be the time to look at ways of making your money work harder for you, we would always advise potential investors not to take the plunge before seeking expert advice.”

Pam Mason, Tax Planning Consultant

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