Investment by Individuals in your Company

There are a number of tax breaks and considerations available for individuals investing in a qualifying trading company (QTC) and other considerations relevant to the company and its management. Under the Enterprise Investment Scheme, tax relief is available if an individual investor buys shares in a QTC, to allow 20% of the amount invested to be deducted from his personal tax. Reinvestment relief may be available if there is reinvestment of capital gains from other sources in shares in a QTC whereby capital gains tax on those gains is not payable until you dispose of your shares in the QTC. You will also need to consider the tax issues specific to the status and position of the individual investor including the availability of tax losses on the sale of shares; the tax position where overseas investors are involved; sheltering capital gains in off-shore share structures and inheritance tax planning.

The Company

You should consider a number of tax issues including selecting an appropriate accounting reference date and the timing of receipts and deductions; and optimising capital allowances on any assets you may acquire as a result of the investment.

Management

As to the position of management, the acquisition by them of shares or options may well be by means of employee share schemes.

This is only an indication of the considerations that may be relevant and professional advice, taking into account the specific position of those involved, is necessary prior to any such investment being made.