Don’t forget the carry back facility
It is possible to ‘carry back’ all or part of your EIS and SEIS investments to the preceding tax year as long as the limit for relief is not exceeded for that year. (The limit for EIS is £1m per tax year, rising to £2m provided £1m of this is invested in knowledge-intensive companies, the limit for SEIS is £100,000.)
This means that you can make a subscription of £3m into EIS and £100,000 into SEIS in 2018/19 with a carry back of £1m for EIS and £100,000 for SEIS to 2017/18 so long as your EIS/SEIS caps for 2017/18 are not exceeded.
- Don’t forget your clients do not need to be fully invested in this tax year in order to qualify for tax relief.
- Clients who need to carry back their investment because they experienced a peak in income last year might, if they invest post tax year end and carry back, get tax relief just as quickly as if they invested in the current year, except they will have benefited from more investment choice.
- You may have clients who need to use more than one year’s income tax in order to make an EIS investment, particularly those who are attempting to manage a large capital gain.
- Clients needing to fully carry back must be invested before the 5th April. But critically they will only need to be invested up to the amount needed to offset against the previous year’s tax.
For details of which funds will be deploying before the tax year end please click here
For details of full range of investment strategies please click here