Financial advisers make use of enterprise investment schemes (EIS) more than venture capital trusts (VCTs), according to new data.
Some 11 per cent of IFAs said they use EIS exclusively, with 2 per cent saying they just used VCTs.
Nearly a third (31 per cent) use EIS and VCTs equally, with a further 26 per cent using EIS predominantly but investing through VCTs ‘when appropriate’.
Some 82 per cent of advisers said the speed of deployment of capital is a very important factor when selecting an EIS manager.
Deepbridge Capital surveyed 168 financial advisers in December 2022.
Andrew Aldridge, partner at Deepbridge Capital, and a board member of the Enterprise Investment Scheme Association, said given the record amounts invested in VCTs last year, you would assume they are the primary tax efficient investment planning tool used by financial advisers.
“It is reassuring to know that EIS continues to be a key tool for advisers when tax planning and seeking long-term growth opportunities.
“Given the current macroeconomic climate, EIS has never been more important for investors, advisers and, critically, the growth-focused early-stage companies for whom EIS funding is invaluable.”
EIS provide income tax relief for investors who commit their capital for a number of years. Investors also qualify for some capital gains tax reliefs.
sally.hickey@ft.com
