EIS portfolios are “the natural complement to pensions” says Oxford Capital

Major changes to the taxation of personal pensions make EIS investment an increasingly valuable alternative and complement to traditional pension savings for high net worth investors says Oxford Capital, the growth capital investor. Together they make for a compelling and sensible retirement funding strategy.

From April 2011 the maximum amount which can be invested in a pension and benefit from income tax relief will be reduced from £255,000 to £50,000.  In addition, from April 2012 the lifetime allowance for tax advantaged pension savings will be reduced from £1.8m to £1.5m after which a recovery charge of 55% will apply.  It will also be difficult to bequeath pension savings once benefits have been taken without hefty tax charges.

EIS portfolios  by comparison, offer attractive tax advantages for long term investors with 20 per cent income tax relief on contributions up to £500,000 and no inheritance tax charges (after two years) or capital gains tax (after three years) no capital gains tax or inheritance tax charges.  In addition investors can defer an unlimited amount of capital gains tax already incurred.

Pension vs. EIS Pension EIS Portfolio
Income tax relief (up to £50k from 6 April 2011) Up to 50% 20%
Income tax relief (over £50k from 6 April 2011) Nil 20% (up to £500k)
Defer Capital Gains Tax already incurred Not available Unlimited
Tax on benefits Up to 50% on income Nil tax on capital gains
Taxation on inheritance Up to 70% (for ASP) Nil
Taxation on benefits over pension lifetime limit
(£1.8 million from April 2012)		 55% recovery charge Nil tax on capital gains

 

Ted Mott, Chief Executive, Oxford Capital says:
“Saving in pensions for the first £50k each year is a highly tax efficient way to save and must be encouraged to ensure that people take responsibility for planning their income in retirement.  However for high net worth investors, saving over £50k a year, and with the arrival of the 50% tax band, there are now alternatives which offer far lower taxation and greater flexibility  and which complement conventional pension savings.

“The tax advantages of EIS portfolios for wealthy investors, include higher levels of relief on income tax, capital gains tax and inheritance tax.  Investors also have the potential to realise significant capital gains from EIS investments in growth companies.

“The taxation rules on pensions are extremely complex and we would encourage high net worth investors to consult a tax specialist before the rules change in April.”

Oxford Capital was the first firm to introduce  the concept of the EIS fund, a diversified portfolio of holdings. The firm manages a wide range of funds, investing in later stage export oriented EIS qualifying companies in the communications, healthcare and  sustainability  markets which offer global potential.  It aims to give investors the potential for a significant capital uplift, superior to normal stock market growth, with a three to four year time horizon by investing prior to a company being acquired or floated. The focus is on risk reduction through carefully diversified portfolios and active management.

Oxford Capital has a Solar EIS fund included in its range, which gives investors income tax relief and the potential to earn tax free capital growth from investment in a diversified portfolio of solar energy assets. The fund will target sites which are suited to generating up to 10kW each on public and commercial properties. This will avoid the planning requirements of large Greenfield site developments, which are already subject to further government consultation, and eliminate the administrative burden of managing multiple small residential installations.

Many leading financial advisers, private banks and wealth managers are introducing clients to Oxford Capital’s range of EIS funds. The minimum subscription in all Oxford Capital’s funds is £25,000 which enables a wide spread of participations.

-ends-

For further information please contact:

Ted Mott, Oxford Capital Partners     01865 860760
Mike Lord, Lord Public Relations       07831 401 311

Important Information
Your capital is at risk by investing in the above products and you should not consider an investment if you are not able to bear this risk. EIS tax advantages are only available to UK tax resident investors and legislation is subject to change. Oxford Capital does not give tax advice and if you are in any doubt about aspects of the EIS legislation then please contact a tax advisor.


Notes to editors

Founded in 1999 Oxford Capital is a specialist investment manager working on behalf of institutional and private investors.  Its focus is on investing in emerging companies around three super-growth themes of communications, healthcare and sustainability. Its expertise lies in accelerating businesses with potential for high growth into global markets.

Oxford Capital currently oversees a portfolio of around 25 companies, many of which have expanded into international markets in Europe, the US, Latin America, the Middle East and Asia.

The firm manages a range of funds designed for private investors, family offices and institutions to access growth capital opportunities and alternative investments. In the UK, Oxford Capital pioneered the tax efficient Enterprise Investment Scheme (EIS) fund which offers a range of tax advantages to investors.

Oxford Capital has offices in the UK and in Switzerland and manages an international network of partners and advisers to support the development of its portfolio companies.

Awards

  • Unquote British Private Equity Awards 2010
    Finalist: Venture House of the Year Award
  • Investor Allstars Awards 2010
    Finalist: Equity Gap Fund of the Year
  • Enterprise Investment Scheme Association Awards 2006.
    Winner: Best EIS Fund Manager
  • Investor Allstars Awards 2006
    Winner: Young Personality of the Year (David Mott)
  • Unquote Private Equity Awards 2005
    Winner: Venture Capital House of the Year

Share this page: