Investors with capital gains tax liabilities have been offered an interesting opportunity through the Budget, according to Charles Owen, the Founder of Coinvestor.
"Whilst a new EIS investment is not subject to any capital gains tax on exit, any capital gain that has been deferred as a result of investing that gain into an EIS scheme will be eventually taxed at a lower rate as a result of these changes,” Owen says.
"Therefore, those facing a 28 per cent CGT liability now, or those who have recently incurred one, could defer that gain and reduce the final CGT bill to 20 per cent on the sale of the EIS shares acquired using the gain.
"That said, EIS is not without risk and that is where investors need to carefully consider how best to select their EIS investments; I would strongly argue that investment into an EIS fund or co-investment alongside a professional EIS fund manager will go a long way to mitigating some of that risk,” Owen concludes.
