According to a new report by Intelligent Partnership, that was put together with the assistance of the EIS association, The market’s growth is set to continue on the back of "new limits on the amounts that can be saved into pensions, the need for diversification and a desire to capture a thriving segment of the UK economy.”
The report is partly based on a survey of 78 IFAs, paraplanners, restricted advisers, wealth managers and financial intermediaries, 53% of whom said they were planning to increase their use of EIS in the next year.
The report also shows that the makeup of the EIS market has changed dramatically, with 28% of the market now made up of energy companies.
Designed to encourage private investment in small and medium sized companies by tilting the risk profile of the sector back in the favour of the investor, the main reason for the attraction of EIS, according to more than 90% of those surveyed was the tax benefits offered.
Under the scheme, EIS investors receive:
Income Tax relief of 30%
No Capital Gains Tax
CGT incurred elsewhere can be deferred
Losses can be offset against either
Income or Capital Gains Tax
Potential for Inheritance Tax Relief (through business property relief after holding the shares for 2 years), the report said.
