Investment Guide – MICAP - MI Capital Research

The following has been printed solely for on 27 April 2024, and should not be relied upon by any other party Try MICAP for free Login No notifications Welcome back Research Tools Overview Investment Listing Filter Compare Build Portfolios Save your Research Your Activity Log Activity Log FAQ MICAP Reviews Review Process MICAP Impact Scores Other Adviser Services Overview Panel Support Services Client Reporting Digital Application Forms Market Information Overview EIS/SEIS Market Snapshot VCT Market Snapshot Enterprise Investment Scheme (EIS) Seed Enterprise Investment Scheme (SEIS) Venture Capital Trusts (VCTs) Tax Treatment (EIS, SEIS, VCT) Business Relief (BR) Key Risks
Investment Guide INVESTMENT GUIDE Overview EIS/SEIS Market Snapshot VCT Market Snapshot Enterprise Investment Scheme (EIS) Seed Enterprise Investment Scheme (SEIS) Venture Capital Trusts (VCTs) Tax Treatment (EIS, SEIS, VCT) Business Relief (BR) Key Risks MICAP’s focus is on investments that confer a government incentivised tax advantage to investors The central aim of the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) is to encourage individuals to invest in smaller unquoted trading companies which often find capital difficult to raise. Social Investment Tax Relief (SITR) is the government’s tax relief for investments into social enterprises. Business Property Relief (BPR) supports business investment generally by providing a potential shelter from Inheritance Tax. All of these incentives have gained significantly in popularity over the last few years. Some of the reasons for this are as follows; Following the financial crisis in 2008 and the lack of bank finance subsequently available, many small and medium sized companies have had to look elsewhere for funding. When the world’s bourses are collapsing, as happened in the last recession, the valuations of unquoted companies can hold up well against general trends. If and when the economy bounces back from recession, small companies can be the quickest to react, expanding rapidly, and seizing market share. Investing early can give spectacular returns because small companies can quickly multiply in size. Individuals are able to support social enterprises and receive incentives for doing so. The underlying sectors, styles and strategies of investment represent a broad range of opportunities, and the available tax benefits are designed to help mitigate the risk of investing in such companies. The following pages explain these government incentives in more detail, from their structure to their associated tax benefits. The following pages refer mainly to five types of investment vehicles: SEIS, EIS, VCT, SITR and BPR and are an outline of the various schemes. This should not be used as a means of proceeding with an investment, since it is not a comprehensive summation of the rules; investors should seek expert, independent professional advice. Furthermore, this summary refers to regulation governing investments made on or after 6th April 2016, and investors should note that legislation may change in the future. For further details of the investment risks please see the Key Risks section of this website.
The MICAP Impact Assessment process is based on the Manager’s answers to our Impact Assessment Questionnaire, which may not be verified or audited by MICAP. The resultant MICAP Impact Scores should not be taken as financial advice or a complete and comprehensive analysis of the risks of investing in the investment, which are usually set out in the Information Memorandum, Prospectus or Brochure supplied by the Investment Manager. Alternative and unquoted investments are inherently high risk and invested capital is at risk. Tax ramifications may vary depending on the investor's personal circumstances. MI Capital Research Ltd is an Appointed Representative of Thornbridge Investment Management LLP (FRN: 713859), which is authorised and regulated by the Financial Conduct Authority.

MICAP’s focus is on investments that confer a government incentivised tax advantage to investors

The central aim of the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) is to encourage individuals to invest in smaller unquoted trading companies which often find capital difficult to raise. Social Investment Tax Relief (SITR) is the government’s tax relief for investments into social enterprises. Business Property Relief (BPR) supports business investment generally by providing a potential shelter from Inheritance Tax.

All of these incentives have gained significantly in popularity over the last few years. Some of the reasons for this are as follows;

Following the financial crisis in 2008 and the lack of bank finance subsequently available, many small and medium sized companies have had to look elsewhere for funding.
When the world’s bourses are collapsing, as happened in the last recession, the valuations of unquoted companies can hold up well against general trends.
If and when the economy bounces back from recession, small companies can be the quickest to react, expanding rapidly, and seizing market share.
Investing early can give spectacular returns because small companies can quickly multiply in size.
Individuals are able to support social enterprises and receive incentives for doing so.

The underlying sectors, styles and strategies of investment represent a broad range of opportunities, and the available tax benefits are designed to help mitigate the risk of investing in such companies. The following pages explain these government incentives in more detail, from their structure to their associated tax benefits.

The following pages refer mainly to five types of investment vehicles: SEIS, EIS, VCT, SITR and BPR and are an outline of the various schemes. This should not be used as a means of proceeding with an investment, since it is not a comprehensive summation of the rules; investors should seek expert, independent professional advice. Furthermore, this summary refers to regulation governing investments made on or after 6th April 2016, and investors should note that legislation may change in the future.

For further details of the investment risks please see the Key Risks section of this website.

The MICAP Impact Assessment process is based on the Manager’s answers to our Impact Assessment Questionnaire, which may not be verified or audited by MICAP. The resultant MICAP Impact Scores should not be taken as financial advice or a complete and comprehensive analysis of the risks of investing in the investment, which are usually set out in the Information Memorandum, Prospectus or Brochure supplied by the Investment Manager.

Alternative and unquoted investments are inherently high risk and invested capital is at risk. Tax ramifications may vary depending on the investor's personal circumstances. MI Capital Research Ltd is an Appointed Representative of Thornbridge Investment Management LLP (FRN: 713859), which is authorised and regulated by the Financial Conduct Authority.