EIS lost if a director?

EIS lost if a director?

Didn't find your answer?

If just been appointed a director of Newco (albeit will not be receiving a salary) will EIS relief be lost on monies to be invested?

I have researched the point and it seems as though the relief will be granted if no salary is received. However I have read conflicting articles.

Has anyone any experience of this?

Thanks
Paul H

Replies (5)

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By yorky1000
21st Nov 2007 14:32

Take proper advice
I have a client with a number of EIS investments and the IR are leaving no stone unturned to check that he qualifies and the company qualifies. The checks are rigourous and they are seeking to prove negligence where there are doubts about the operation of the rules in two cases. They are also revisiting earlier years claims to ensure the companies still qualify. They are even suggesting that anyone investing in EIS should have read the IR's own information on these matters.

For the amount it would cost you or your client I would recommend informed advice be taken and delivered to you in writing thereby being on someone else's PI insurance. The rules are too complex to be plucked from a text book.

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By User deleted
21st Nov 2007 18:10

Not always
There seems to be no problem if the appointment is merely to 'watch over' funds and provide non-exec support.

The more involved the less likely the relief is going to be granted and allowed going forward.

As always don't let the tail wag the dog, if commercially it makes sense to get involved then do so as the reliefs, evem with the proposed increase to 18% in CGT are still pretty good.

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By yeboyye
22nd Nov 2007 11:45

EIS investment
Will EIS relief be lost on monies "to be" invested?
I think the money should have been invested before appointment as a director.
The EIS is a minefield. Take advice.

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By AnonymousUser
22nd Nov 2007 13:33

Revenue manuals
I would suggest that you read the Revenue manuals around VCM25040 to 25080 . The outline information suggests that as an unpaid director you would not be connected, and therefore relief would be available.

To avoid this issue you should have made the investment first and then become a director, which would have entitled you to relief under the business angel rules even if you were otherwise connected witht he company.

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By nick farrow
19th Dec 2007 12:56

Looking for EIS expert
I am looking for EIS expert to recommend to brother of client as I am no EIS expert myself - perhaps one of you guys can you give me your contact details

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