EIS vs VCTs: Who's Your 2025 Tax-Efficient Investment Champion?

About the event

As we approach the tax year-end, this session equips IFAs, Tax Advisors, Wealth Managers, and EIS Professionals with the knowledge to confidently make investment strategies. Our panel will delve into the intricacies of two popular UK tax-advantaged investment vehicles: the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs).
The goal of this webinar is to fully explore how and when EIS and VCTs can be suitable for your clients:

– How the budget has impacted the suitability of the schemes.
– Key differences in structure, eligibility, and the tax reliefs available for each.
– The types of investors who can benefit most from either scheme.
– How to strategically use both EIS and VCTs in a tax-efficient investment portfolio.
– How to tap into the strengths of different investment providers to create a balanced portfolio

31-01-2025

14:00 to 15:00 GMT

Zoom Webinar

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What are the key risks?

• If the business you invest in fails, you are likely to lose 100% of the money you invest. Most start-up businesses fail.

2 – You are unlikely to be protected if something goes wrong

• Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here. (https://www.fscs.org.uk/check/investment-protection-checker)

• Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here. (https://www.financial-ombudsman.org.uk/consumers)

3 – You won’t get your money back quickly

• Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.

• The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.

• If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.

4 – Don’t put all your eggs in one basket

• Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.

• A good rule of thumb is not to invest more than 10% of your money in high-risk investments (https://www.fca.org.uk/investsmart/5-questions-ask-you-invest)

5 – The value of your investment can be reduced

• The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.

• These new shares could have addition rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here (https://www.fca.org.uk/investsmart)