Tax Planning
We offer a range of HMRC-endorsed tax planning products and solutions for high net worth and sophisticated investors. These are designed to reduce tax bills, whilst stimulating the economy by investing in early-stage, growth orientated UK companies. These products and solutions put UK investors in a particularly fortunate position and can make a compelling addition to a modern, risk-managed portfolio.
Many investors have been looking to alternative tax-efficient asset classes for returns in recent years, against a backdrop of annual pension contribution limit restrictions, Capital Gains Tax limits reducing, a struggle to find portfolio income elsewhere and a reliable source of tax relief in an otherwise uncertain tax landscape. Tax planning products can address these needs. We are able to offer Venture Capital Trusts (VCTs), Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) investments to provide an ideal solution.
Such schemes were historically regarded as being solely for the wealthy. However, they are becoming an increasingly staple part of a sophisticated investor’s portfolio offering a ‘risk on’ approach and a low correlation to traditional markets. These are described in more detail below:
Venture Capital Trusts (VCTs)
A VCT is a publicly listed investment company run by a fund manager and quoted on the London Stock Exchange. VCTs are designed to encourage individuals to invest indirectly in a range of young, innovative, unquoted, higher risk trading companies and to make money through helping them grow. The government is keen for experienced investors to invest in this kind of company, because they create jobs and support economic growth. To help compensate for the higher level of risk involved, the government offers generous tax benefits.
Enterprise Investment Scheme (EIS)
The EIS is a scheme introduced by the government in 1994 to help small companies to raise funds and grow. A private investor investing in an EIS-qualifying company can receive very substantial tax breaks. EIS-qualifying companies vary significantly, across a wide range of sectors and industries, but young and innovative businesses are a priority within the scheme. Those companies that qualify need to carry on a business with a view to making a profit and there are further restrictions on the age and size of a company. Despite these restrictions, there remains huge scope for investors. We offer investments in the scheme through EIS funds. These are higher risk investments and are only suitable for experienced investors. Again, to compensate for the higher level of risk involved, the government offers generous tax benefits:
Up to £1 million (or £2 million if investing over £1 in knowledge-intensive companies)
Up to £300,000 per year (or £600,000 if investing in knowledge-intensive companies)
From other investments
The investment can be passed on free of IHT provided it is held for 2 years
Offset any future losses against your income to save income tax
Seed Enterprise Investment Scheme (SEIS)
The SEIS is a scheme introduced by the government in 2012/13 following the success of the EIS and to complement it. Its aim is to support the growth of smaller and typically younger businesses, with potential for the investor to benefit from greater tax benefits. A SEIS-qualifying business must have traded for a minimum of 2 years, have less than £200,000 of gross assets and less than 25 employees at the point of investment. We offer investments in the scheme through SEIS funds. These are higher risk and investments and are only suitable for experienced investors. To compensate for the higher level of risk involved, the government offers generous tax benefits:
Up to £100,000
Up to £50,000 per year
Up to 50% reinvestment relief from other investments
The investment can be passed on free of IHT provided it is held for 2 years
Offset any future losses against your income to save income tax
Understanding the risks
VCTs and EISs are high risk investments which invest in small, unlisted, or AIM-listed companies. There may be no market for the shares should you wish to dispose of them, and you may lose your capital. SEISs are very high-risk investments which are usually concentrated in a small number of unquoted trading companies or a single unquoted company and there is a possibility one or more of these companies failing.
Consequently, VCT & EIS providers encourage investors to take advice from a regulated professional adviser to ensure suitability of their investment. At Best Advice Wealth Management, we offer VCT and EIS investments on an advised basis, so this is where we can help.
Within our assessment, we will look at your personal tax circumstances, previous investment experience, attitude to risk and capacity for loss to ensure that the product is suitable for your needs. We are fully regulated and authorised by the FCA to provide advice on tax planning products, which means that in the event that the product was not suitable to meet an individual’s needs, the investor has recourse to the Financial Ombudsman Service (FOS) to independently assess the merits of the advice provided. We are required to seek to deliver the best outcomes for our clients and are obliged to carry professional indemnity insurance in this regard. If you were to purchase a VCT from a regulated distributor on a non-advised basis, you would not receive the same level of service or the reassurance of FOS protection.
Lowest Advice Fees
We are confident that our fees for providing advice on these types of investment are the lowest that you will find anywhere in the UK.
- For VCT investments, our advice fees are 1% of the amount invested, subject to a minimum of £300 in addition to provider fees which vary across fund managers and are typically 3% upfront.
- For EIS & SEIS investments, fees also vary across providers but we are confident that the costs to investors, including our advice fees will be cheaper than any other distributors, including those who offer products on a non-advised basis.
At Best Advice Wealth Management, we are able to arrange tax planning products through ALL of the main UK recognised providers including:
Octopus
FORESIGHT
TIME
DOWNING
PUMA
UNICORN
TRIPLE POINT
ALBION
PEMBROKE
MAVEN
EDITION
MOBEUS
BLACKFINCH
FOCUS
Get In Touch Today
We can guide you through your own financial situation and provide expert advice on tax planning solutions to meet your needs. We invite you to get in touch for a no-obligation discussion around how we can help.