Many advisers appear to be adopting a contrived and narrow interpretation of the word ‘preferential’ in an attempt to provide commercial protection to EIS investors on a winding-up, warns Oliver Twentyman (Azets).
The Enterprise Investment Scheme which evolved out of the earlier Business Expansion Scheme was created to encourage people to invest in small start-up companies. It does so by offering generous tax reliefs to individuals who do so.
This tax relief is a form of State aid as it provides investors a potentially market-distorting incentive to invest in companies with permanent establishments in the UK. For that reason the conditions required to qualify for EIS have been gradually tightened up and are strictly applied.
In this article we are concerned with just one of the many conditions namely ITA 2007 s 173(2)(aa) which makes clear that EIS-qualifying shares cannot carry ‘any...
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Many advisers appear to be adopting a contrived and narrow interpretation of the word ‘preferential’ in an attempt to provide commercial protection to EIS investors on a winding-up, warns Oliver Twentyman (Azets).
The Enterprise Investment Scheme which evolved out of the earlier Business Expansion Scheme was created to encourage people to invest in small start-up companies. It does so by offering generous tax reliefs to individuals who do so.
This tax relief is a form of State aid as it provides investors a potentially market-distorting incentive to invest in companies with permanent establishments in the UK. For that reason the conditions required to qualify for EIS have been gradually tightened up and are strictly applied.
In this article we are concerned with just one of the many conditions namely ITA 2007 s 173(2)(aa) which makes clear that EIS-qualifying shares cannot carry ‘any...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
