There are several investment opportunities available, which are specifically tax-favoured within the UK tax legislation. The main investments opportunities and their tax benefits are summarised below.

Venture Capital Trusts (VCTs)

A VCT is a specialised form of investment trust, which carries certain tax advantages for individuals who subscribe for eligible shares; if certain conditions are met, a VCT investment can provide the following benefits:

• Income tax relief of 30% is given on investments of up to £200,000;
• Dividends paid by the VCT are exempt from income tax in the hands of the investor;
• Disposals of VCT shares are exempt from loss relief is not available;

Enterprise Investment Schemes (EIS)

EIS companies are unquoted companies, and tend to be start-up ventures or smaller companies looking to raise venture capital. The EIS legislation was introduced in order to encourage investment in small UK companies, which carry on qualifying trading activities. Subject to certain conditions being met, EIS investments can provide the following benefits:

• Income tax relief of 20% (30% from 6 April 2011) is given on investments of up to £500,000 (£1,000,000 from 6 April 2012, subject to confirmation);
• Disposals of shares are generally free of CGT (assuming they have been held for 3 years), and any losses are usually allowable against capital gains or income;
• It is possible to defer Deferral of other CGT liabilities into the acquisition of EIS shares, providing those EIS investments are made within a certain time frame;
• Potential to carry back EIS income tax relief to previous tax year;
• Business property relief from inheritance tax.

We are a member firm of the Enterprise Investment Scheme Association.

Enterprise Zone Property Unit Trusts (EZPUTS)

An EZPUT is an unauthorised unit trust, which is invested entirely in property in Enterprise Zones. These investments take advantage of the generous capital allowances available to encourage regeneration in the government nominated Enterprise Zones.

EZPUT investments can provide the following benefit:

• An individual can set off up to 100% of the cost of acquisition and development (but not the cost of the land) against their income in the tax year in which the investment is made.

Business Premises Renovation Allowance (BPRA)

The BPRA is a government initiative to encourage conversion and renovation of empty business properties in designated areas.

BPRA Investments can provide up to 100 per cent tax relief to property owners for qualifying capital expenditure.

Individual Savings Accounts (ISAs)

All income and gains derived from investments within an ISA are tax free and withdrawals from the account will not attract any tax charge.

The maximum amounts that can be invested during each tax year are as follows:

Personal Pensions

Up to certain limits personal pension contributions qualify for tax relief, which increases the value of contributions to your pension fund and/or reduces your tax bill. Please see our separate summary for more details regarding Pension Planning.

Inheritance Tax (IHT)

Certain investments provide tax advantages for IHT purposes, provided they are held for a certain qualifying period. Depending on your circumstances, this type of planning may be appropriate in order to achieve your overall IHT planning objectives. Please click here for more information on IHT Planning.

We are not ourselves registered with the Financial Services Authority to conduct regulated business. We therefore have no interest in earning the highest commission from the sales of investment products.

We will work with your Independent Financial Advisor or we can introduce you to an IFA we have worked with in the past who can take care of the FSA aspects. However, our focus is on ensuring that any investment strategy you may select meets with your overall financial and taxation objectives.

If you would like to discuss the tax implications of any of these types of investment, please contact us.