Are EISs suitable for your clients?

TAX PLANNING

The EIS has a cocktail of tax benefits and, of course, it is most appropriate for someone who can make use of the maximum tax breaks.

The EIS is effectively the “only place to go” to defer a capital gains tax liability, so clients with CGT bills are the number one prospect. If, in addition, they are older and looking to shelter part of their estate from IHT, so much the better. In fact, combining CGT deferral and IHT is one of the most powerful tax-planning tools – effectively killing two taxes with one investment. There is also income tax relief to be obtained and following the recent relaxation of the carry-back rules, it is possible to carry income tax relief back to the prior year up to the annual maximum invest...