Risk factors

You must carefully consider all of the information contained in the latest Kuber Scheme Guide, located under Library section of our web site  to help determine whether an investment with Kuber constitutes a suitable investment for you in light of your personal circumstances, tax position and the financial resources available to you.

The Managers will be investing in unquoted, high risk companies, which are not suitable for all types of investor. You are therefore strongly recommended to seek independent financial and tax advice from a suitably qualified professional adviser before undertaking an investment with Kuber. If in doubt you should not proceed. Please note that Kuber is not in a position to advise you on your personal circumstances, or to enter into a discussion with you as to the merits (generally, or for you personally) of any investment.

This section details the material risk factors that we believe could adversely impact an investment through Kuber or the availability of tax reliefs to you. It does not represent an exhaustive list of risks factors, nor have they been set out in any particular order of priority

Investment risks

  • There is generally no external market for shares issued by EIS Qualifying Companies and it could be difficult or even impossible to realise the investment or obtain accurate performance information
  • The return on any EIS Portfolio will depend greatly on the Manager’s performance. Past performance of any Manager is no guide to future performance
  • EIS Shares will not be listed on a recognised Stock Exchange. An investment in EIS Shares should be regarded as a longer term investment (a minimum of three years to retain the tax reliefs, but please bear in mind that disposal or realisation of an EIS investment may take much longer than this). Realisation of your investment will generally depend on the Exit available to the Managers, and that in turn can be significantly affected by external market circumstances over which they have no effective control
  • Investments in small or medium unquoted companies by their nature involve a high degree of risk and there is a strong possibility of EIS Qualifying Companies failing. Your capital is at risk and you may not receive back the amount invested or any return
  • There is no guarantee that the market value of an EIS company will fully reflect the underlying net asset value. Investors should be aware that the value of an investment in an EIS Portfolio and the income (if any) derived from it may go down as well as up
  • The expected life of each EIS investment is three to five years or more
  • EIS Managers reserve the right to realise an investment within the three year period if this is considered by them to represent a worthwhile return on the investment; however, this would jeopardise the availability (or continued availability) of appropriate EIS tax reliefs and benefits
  • Any returns accrued from cash deposits will principally be affected by movements in interest rates

Commercial risks

  • Investee Companies may be exposed to exchange rate fluctuations which affect both the profits of the company and the value of the shares
  • EIS Qualifying Companies typically have small management teams and are highly dependent on the skills and experience of a small number of individuals

Tax and regulatory risks

  • Tax reliefs are subject to approval by HMRC in accordance with their qualifying rules, which could change from time to time
  • It may take some considerable time from the date shares are issued to obtain the income tax relief
  • Business Property Relief for inheritance tax only applies when an IHT event takes place and applies to shares but not to cash proceeds or cash awaiting investment. Shares must have been held for two or more years and must still meet the qualifying requirements
  • There is no guarantee that EIS qualifying investments will be available to re-invest into when investment proceeds are returned to the Administrator
  • The various tax benefits described in this Guide are based on Kuber’s understanding of the current tax legislation and HMRC practice. This interpretation may subsequently be found to be incorrect. Tax legislation and HMRC practice may change in the future in a manner which could adversely affect your investment
  • The amount of tax relief you may gain from subscription through Kuber depends on your own personal circumstances. You are strongly advised to seek independent professional advice in relation to the tax implications of your investment through Kuber
  • The Managers will take all reasonable steps to make sure that tax relief is available on all investments made by the Portfolio. However, tax relief could be withdrawn or modified in certain circumstances and neither Kuber, nor the Managers, nor the Administrator accepts any liability for any loss or damages suffered by you or other person as a consequence of such relief being denied or withdrawn or reduced
  • You may lose some or all of the tax benefits derived under the EIS if you fail to comply with the relevant legislation. Such a situation might arise, for example, if you cease to be a UK tax resident during the Relevant Period or you receive value from an Investee Company, other than by way of an ordinary dividend, in the period commencing one year prior to the issue of EIS Qualifying Shares to the end of the Relevant Period
  • Where an Investee Company ceases to carry on a Qualifying Trade during the Relevant Period, whether through the actions taken by the Investee Company or otherwise, its EIS qualifying status may be adversely affected and therefore so will the tax relief available to you. No guarantee can be given that all investments made by the Managers will carry on a Qualifying Trade, or continue doing so, for the purpose of claiming tax relief. The Managers will, where possible, implement measures to reduce this risk, such as seeking advanced assurance from HMRC that each company in the Portfolio is an EIS Qualifying Company
  • The Investor is advised that funds subscribed to a given Portfolio may not be invested for some time after the Acceptance Date and that as a result, certain Tax Benefits may not apply until the monies are invested in accordance with the Investor Agreement
  • No guarantee can be given that an Investee Company will retain EIS qualifying status
  • Any disposal of EIS Shares during the Relevant Period will crystallise an obligation to repay the income tax relief claimed in respect of those shares, and any capital gain will be subject to capital gains tax