Benefits of a Deepbridge EIS

The 100% Rule

Deepbridge EIS propositions are manager fee-free EIS opportunities at the point of investment for subscriptions received by a financial adviser. Investors are therefore not charged any manager fees at the point of investment, if subscriptions are received via a financial adviser. Upfront and most ongoing manager fees are paid by the Investee Companies: this advantage allows investors to enjoy up to 100% of EIS tax benefits and to have up to 100% of their investment actually put to work earning investment returns. Please note that, in line with the Retail Distribution Review, Deepbridge can facilitate financial adviser fees: this may result in a deduction from subscription prior to the deployment of funds.

Growth-focused

Investing in smaller UK businesses has the potential to offer significant long-term growth, if they are successful. Smaller businesses often have the possibility for quicker growth than larger businesses although they also carry a higher risk of loss and value can be more volatile.

Diversification

Smaller companies often behave and perform in a different manner to larger listed organisations. Therefore, investing in early-stage, unquoted companies, whilst benefiting from the potential tax reliefs available via the Enterprise Investment Scheme, may bring additional diversification to an investment portfolio.

Alternative Investment

As pension lifetime allowances have reduced, many investors require alternative forms of tax efficient long-term investment, such as an EIS. Deepbridge always recommends that clients seek advice from their financial adviser to ensure their financial planning is cohesive.

Risks

Money is at risk

Investment in unquoted companies carries high risks. It is highly speculative and potential investors should be aware that they could lose the total value of their investment. Investors should be aware that investment in smaller unlisted companies (including EIS and SEIS qualifying companies) carries with it a high degree of inherent risk, regardless of any tax advantages which such an investment might carry and/or regardless of any steps taken to attempt to mitigate that risk. Investment in a Deepbridge EIS or SEIS should therefore be considered a high-risk investment.

Long-term Investment

EIS and SEIS shares are held in unlisted companies, from which investors might only be able to exit via a refinance or company sale. EIS and SEIS shares must be held for at least three years in order to qualify for income tax relief. If shares are sold prior to being held for three years, any claimed income tax relief will have to be repaid. EIS and SEIS investments should therefore be considered as a medium-term or long-term investment and investors are unlikely to have access to their capital during the investment period. No established market exists for the trading of shares in private companies, making it difficult to sell shares.

Tax rules may change

EIS and SEIS tax reliefs are specific to an individual’s circumstances. Tax rules may change and companies may not always be EIS or SEIS qualifying. If a company fails to meet the requirements of EIS legislation, or if qualifying status is not maintained, tax reliefs may be withdrawn and investors may have to repay rebated tax. HMRC may change the rules on EIS and SEIS tax relief at any point.

Please see respective Information Memorandum’s for more detailed risks.

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EIS: The Basics – On Demand

Our industry leading educational programme covers the basics on what you need to know to recommend an EIS.
If you’ve never recommended an EIS before, we suggest you start with episode 1.

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EIS: Advanced – On Demand

This is recommended for advisers who have completed the EIS—The Basics course, who already recommend EIS, or who are confident in tax-efficient investments.

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IMPORTANT: The views expressed in these webinars are the views of the individual and not necessarily of Deepbridge Capital LLP. Figures quoted by the presenter and/or guest may be approximations. The content of these videos should not be construed as financial advice. This video is a real-time financial promotion and, as a result, has not been approved as a financial promotion for the purposes of Section 21 of the Financial Services and Markets Act 2000.

RISK WARNING: Any decision to invest should be made only on the basis of the relevant documentation for the investment available in the accompanying company profile. Investments in unquoted companies carry high risks. Capital invested will be at risk and you could lose all of your investment. No established market exists for the trading of shares in private companies, making it difficult to sell shares.

Tax treatment depends on the individual circumstances of each investor and may be subject to change in future. The availability of tax reliefs depends on the Company invested in maintaining its qualifying status. Past performance is not a reliable indicator of future performance.

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