January is always a busy time of year for the British taxpayer. With just under two weeks left for people to file their tax return, now is an opportune moment for Britons to assess their tax strategy and consider ways of effectively managing their tax expenditure.
For high-net worth individuals, venture capital trusts and tax-efficient investment schemes such as the EIS and SEIS are rising in popularity. Updated HMRC statistics have revealed that the number of investors claiming income tax relief on Self-Assessment forms under EIS increased from 28,830 in 2013-14 to 29,380 in 2014-15.
The reason for the growing popularity of the EIS stems from the attractive tax advantages, the investment diversity on offer and the changes in pension legislation. EIS investments receive a 30% income tax relief, which is claimed back via a tax return. Moreover, investments made through the EIS are also exempt from Inheritance Tax after an investment period of two years and, provided the shares are held for a minimum of three years, there is no Capital Gains Tax.
With effective management of one’s tax expenditure high on the agenda, January is often an ideal time of year to consider how investment through the EIS can help support both your tax and investment strategy.