Page 62 - Praetura EIS 2019 Information Memorandum

Praetura will ensure all investments
made within the Fund are suitable

The same for EIS qualification
investment offers
62% better return To qualify under the EIS rules, a company must meet
with EIS tax reliefs various criteria, the main ones are as follows:
than without
Qualification & Benefits • is established in the UK;

• isn’t trading on a recognised stock exchange at the time
of the share issue and doesn’t plan to do so (also known
Initial Investment
as an unquoted company);
• doesn’t control another company other than qualifying
Invest with EIS Relief Invest without EIS Relief
subsidiaries;
Total Investment £100,000 £100,000 • isn’t controlled by another company or doesn’t have
Less: Income Tax Relief (£30,000) £- more than 50% of its shares owned by another company;

Net Cost of Investment £70,000 £100,000 • must not have gross assets worth more than £15 million
before any shares are issued and not more than £16
million immediately afterwards;
Investment Returns (assuming company doubles in value)
• has fewer than 250 full-time equivalent employees at the
time the shares are issued;
Invest with EIS Relief Invest without EIS Relief
• must carry out a qualifying trade. Trades that are
Sale of Shares £200,000 £200,000 excluded include coal or steel production, farming,
leasing activities, legal or financial services, property
Less: Net Cost of Investment (£70,000) (£100,000)
development, running a hotel or nursing home,
Total Gain / (Loss) £130,000 £100,000 generation of electricity, heat, gas or fuel;

Capital Gains Tax £- (£20,000) • can’t raise more than £5 million in total in any 12-month
period unless the company qualifies as a Knowledge
Net Gain / Loss £130,000 £80,000
Intensive Company in which case the annual limit
Percentage Gain on Net Cost 186% 80% increases to £10 million.

* No capital gains as long as shares held for 3 years
** Receive loss relief equal to capital at risk. Net cost of investment (£70,000) multiplied by assumed personal tax rate of 45%