EIS or Enterprise Investment Scheme is one of the tax-friendly investment procedures for those who are into business. Taking EIS loans is one of the most beneficial ways for making your company grow.
Helps with economic growth
Many renowned companies encourage investment in new shares and with various EIS schemes, economic growth becomes easy. EIS helps in flourishing over economic development, especially if you have a small business. One of the biggest eligibility, which is necessary for qualifying business is the capital that you are taking from the investors of EIS should be used for development. Along with that, you can also use the money for expanding the business.
If you want, you can also use the EIS shares. It is important to remember that; you cannot use the money for trading or company acquisitions. EIS also offers loans to those who are interested in supporting burgeoning as well as high-risk small businesses. You would only get the money in the form of compensation or tax benefits.
Helps with tax benefits
Taking EIs loans can help with tax benefits and the tax incentives are offered for encouraging investment just by lowering the threats of investing. Various EIS shares are there that come with extra upside potential of particular return on investment.
If you take full advantage of the tax reliefs, you can get almost 98% tax benefit, which is no doubt a huge benefit. Therefore, you can understand that EIS loans can bring major benefits to your company.
Helps in providing an exemption from CGT
It is necessary to understand that the tax-free growth of the capital investment that comes in exemption form through capital gains tax is an outstanding benefit of EIS investment. You would only get this exemption only on the capital gain and relinquishment of the shares.
Besides, you would have to keep in mind that you should hold the share relinquishment for about three years. An important condition, which you should be aware of, is the grant of income tax relief.
Helps with loss relief
When handling business, chances are there that you might suffer from the loss. If you decide on selling the EIS shares during the business, and you suffer any loss, then taking an EIS loan, you can reverse the loss. All you have to do is claim the loss you made.
Hence, these are some of the ways by which EIS loans can boost the growth as well as the profit of your business.