Should property investors consider Enterprise Investment Scheme (EIS) during 2017?

Chris Street

17th February 2017

By Louise Misiewicz

What are the prospects for property investors in 2017?

Have you considered other investment options such as an Enterprise Investment Scheme (EIS)?

As leading property tax accountants and wealth planning experts, my team and I are always looking to provide the best wealth management strategies for our property investor clients.

And with news breaking in the last fortnight that managers and promoters of EIS schemes and portfolios are expecting to attract a record volume of assets in the current tax year as investors try to take advantage of the investment opportunities and tax breaks available, I think it’s worth taking a closer look at EIS.

According to industry news, two organisations in the sector Growth Invest and Kuber Ventures saw significant increases in interest from the adviser and wealth manager communities in the last quarter of 2016, and EIS is another viable investment option for buy-to-let landlords in 2017.

Will there be an explosion of EIS interest during 2017?

Millennials are twice as likely to embrace early-stage investing such as EIS than older generations, according to research from SyndicateRoom, but does this mean that seasoned property investors will also consider investing in EIS as well as property investments during 2017?

I wrote a detailed article here about the benefits in terms of mitigating CGT by investing in EIS which is well worth reading and considering when looking to sell any of your buy to let investments.

It’s also been argued recently that although a successful source of investment, the EIS market in the UK remains relatively small in relation to the potential earnings from these investment schemes.

Can property investors boost their investments through EIS?

I would argue that property investors are essentially concerned with investing in property – sounds obvious, really – but there’s always scope to invest in other areas. Particularly relevant when the property investment market has been hit hard in the last 12 months by some harsh legislative measures.

I wrote a detailed blog post here recently about the different ways in which higher rate taxpayers can benefit from residential property investment. This is well worth reviewing and considering in 2017.

Why should you consider EIS investments during 2017?

The numbers for EIS certainly make for attractive reading.

The EIS scheme has been a great success since its inception, and has raised more than £14.2bn of funds for more than 24,620 companies. HMRC statistics released in October 2016 reported a record year of £1.812bn raised for 3,264 companies.

It’s been claimed by industry experts that if financial advisers and the mainstream media were to get behind the EIS, the potential marketplace could be at least 10 times the current 30,000 established investors – and one million EIS investors could be viewed a realistic target for the sector

I’m not so sure about that level of engagement in EIS happening during 2017, but we’re certainly advising our property investment clients to consider EIS options available this year. We can advise you further.

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