2fnoNyY

Thought Leadership
RISK EQUALS REWARD:
UNDERSTANDING TAX-
EFFICIENT INVESTMENTS
EIS can bring rewards for clients but advisers must
be clear about the risks associated with alternative
investments, says Ian Warwick, Managing Partner at
Deepbridge Capital
According to HMRC data,
during the 2014/15 tax year the
amount raised by UK companies
seeking funding via EIS was a
record £1.7 billion. Much of this
was raised via financial advisers
seeking tax-efficient investment
opportunities for clients that
either have a specific tax need
or have an interest in investing
in small UK businesses.
In previous years, the growth in
appeal of EIS investments has
often been attributed to the rise of
renewable energy within this space
and the asset-backed, subsidised
nature of such projects offering
‘capital preservation.’ With the
Chancellor removing subsidised
renewable energy projects from
EIS eligibility it is good to see that
there remains growing appetite
for provision of equity funding to
UK SMEs via EIS.
However, it is important that
advisers and investors understand
the unique risks associated with
such investments.
Yearbook 2016/17 · www.eismagazine.com
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