where an investor's only connection with an EIS eligible company is by way of being an unpaid director, income tax relief is NOT withdrawn if they subsequently become a paid director. Providing the remuneration is reasonable. What constitutes reasonable? My view is that a 30% shareholder in an EIS eligible business, who is the founder and runs the show can only hope to benefit from EIS treatment if they restrict their rewards to capital gains on exit and dividends in the meantime and no remuneration as it feels to me that any remuneration is dangerous and prejudicial to EIS eligiblity. Do other members agree?
08th Feb 2013 10:11