Foresight WAE Technology EIS Fund

An Enterprise Investment Scheme (EIS), investing into early-stage, unquoted companies that are developing disruptive technology and pioneering innovation.

Offsetting 30% income tax

Qualifying investors can claim to offset 30% (20% prior to 6th April 2011) of their investment in a qualifying EIS company against their income tax liabilities

Capital gains tax deferral

Investors can defer capital gains (CG) against the amount invested. CG from disposal of EIS shares are exempt from CG tax. EIS shares also fall outside inheritance tax purposes, if held for more than two years.

Offsetting losses

Losses on EIS shares can be offset against income or capital gains tax liabilities.

Key Facts

Fund Name Foresight WAE Technology EIS Fund
Fund Structure Unapproved EIS Fund
Minimum Investment £10,000
Sector Focus Unquoted, often early stage, companies that are commercialising potentially disruptive hardware technology or industrial software
Investment Horizon Target 18 months from each respective closing date

FAQs

An Enterprise Investment Scheme (EIS) is a tax-efficient investment that was introduced by the UK Government in 1994 to incentivise investment into smaller UK companies. Investors are incentivised with relief on Income Tax, Capital Gains Tax and Inheritance Tax.

EISs can be categorised into three main types:

EIS Portfolio The investor invests in a range of qualifying companies. The companies held will typically be larger than those in an SEIS. Although qualifying rules determine the companies that can be held, a range of risk is available in this investment.

Single Investment Company EIS This is typically used by investment professionals and is where an investor invests directly into one business. This is used specifically to back companies in which the investor has a lot of confidence.

SEIS Investing into smaller businesses than a standard EIS. Additional reliefs are available as a result to compensate for the extra risk of a smaller business.

The rules associated with EISs are:

  • The investment must be into new shares
  • The investee company must have fewer than 250 employees
  • The investee company must use the money raised within 24 months
  • Companies must be unquoted or listed on the Alternative Investment Market (AIM)
  • The company must not be controlled by another company
  • Any investment of EIS funds must not exceed more than £10 million per 12 month period
  • Certain trades are excluded, for example, mining and financial services companies.
  • For any new investments, there is an investment cap of £12 million (£20 million for knowledge intensive businesses who may also have up to 499 employees).
  • For any new investment, managers are no longer able to finance Management Buy-Outs or Acquisitions.
  • For all new investments a qualifying company must be no more than 12 years old, unless fundraise will fundamentally change business activity. The company must also have made their first commercial sale within the last 7 years.
  • For all new investments (as of April 2018), knowledge intensive companies must have made the first commercial sale or reached turnover of 200,000 in the last 10 years.

Capital is at risk. The value of an investment, and any income from it can fall as well as rise and investors may not get back the full amount they invest. Enterprise Investment Schemes (“EIS”) should be considered longer-term investments and may be higher risk and more difficult to realise than an investment in listed securities. Tax reliefs are dependent on investee companies maintaining EIS qualifying status and investors’ individual circumstances. Current tax rules are subject to change.

Past performance is not a reliable indicator of future performance. Foresight Group LLP does not provide investment, legal, tax or other advice and the information on this website should not be construed as such. We recommend investors seek advice from a regulated financial adviser.

Investors should only invest in Foresight EIS funds on the basis of information contained in the applicable Documentation (including any Brochure, Fund Prospectus, Offer Documents, Key Information Documents and Disclosure Documentation) or Terms and Conditions of Investment as appropriate.

Please refer to our Risk Warnings page for full general and specific risk information.

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