Page 31 - Kavka Proposal Web

• It is possible that economic factors may decrease the reliefs cannot be guaranteed, and it is the responsibility
disposable income that customers have available to spend of prospective Investors to obtain their own independent
on drinking and eating out and other leisure activities or may taxation advice to confirm that they are eligible, and will
adversely affect customers’ confidence and willingness to continue to be eligible, to benefit from the EIS Reliefs.
spend. This could affect the performance of the Company.
• • There are certain circumstances in which an Investor may
• The UK Government is also considering initiatives to deal not qualify for the taxation benefits under the EIS. These
with social led ‘‘binge drinking’’. Whilst the Directors do not include situations in which a Shareholder is connected
consider that these initiatives will be directly relevant to the with the Company at any time in the period commencing
Company given its “Super- Premium” position in the market, two years before the relevant EIS Qualifying Shares are
international reach and customer profile, any focus on the issued and ending three years after or, if later, three years
potentially harmful effects of alcohol may reduce sales of after commencement of the Qualifying Trade. An Investor
alcoholic beverages. may become connected with the Company if he and his
Associates acquire or are entitled to acquire more than 30%
• If the maximum offer proceeds raised by the Company are of the EIS Qualifying Shares. This could occur, for example,
not achieved, the proportion of charges and expenses borne if a Shareholder is a member of a partnership, or becomes
by the Company may be higher and the value of any income a member of a partnership, in which another Shareholder is
may consequently be reduced.
also a member, or where investments in the Company held
2. Risks relating to Taxation by the Shareholder and certain of his relatives exceed the
30% threshold.
• This Brochure is prepared in accordance with the Directors’
interpretation of current legislation, rules and practice. Such • If the Company does not satisfy the criteria for maintaining a
interpretation may not be correct and it is always possible Qualifying Trade throughout the EIS Qualifying Period, then
that legislation, rules and practice may change. Any such this could prejudice the EIS qualifying status of the Company
changes, and in particular any changes to the bases of and therefore, the tax benefits available to the Shareholders
taxation, tax relief, rates of tax or the Shareholder’s tax under the EIS.
position, may affect the availability of tax reliefs and deferrals • Income Tax Relief is only available for the tax year during
and may also affect the return received by the Shareholders which shares are issued to a subscribing Shareholder
from the Company.
(subject to the carry-back provisions described in Part 4).
• Advanced assurance has been received from HMRC that “Issue” takes place when a share application is completed
the Company should be a qualifying trading company for by entry of the shareholding in the applicable share register
the purposes of the EIS legislation. Although Shareholders of the Company. If an Investor disposes of EIS Qualifying
are expected to obtain EIS Relief on their investment as Shares within the EIS Qualifying Period applicable to those
appropriate, the Company cannot provide any warranty or EIS Qualifying Shares, such Shareholder may be subject
guarantee in this regard or any warranty or guarantee that, to claw-back by HMRC of any Income Tax Relief originally
if EIS Relief is given, such EIS Relief will not be withdrawn. claimed and, in addition, any deferred capital gains will
Investors must take their own advice and rely on it. crystallise and the benefit of any CGT Exemption may be lost.
Accordingly, investing in the Company may not be suitable as
• There can be no certainty that HMRC will agree that the a short- term investment.
Investors’ or the Company’s tax position is as described
in this Brochure, although there is no reason, as far as • Tax law is complex and investors should seek independent
the Directors are aware, to expect that they will not do tax advice to determine and understand the suitability of
so. Changes in the financial and tax position of either the subscribing for EIS Qualifying Shares and any effect that this
Investor or the Company may also affect their respective may have on their own position generally.
returns from the Company.
• The taxation benefits described are dependent upon an
Investor’s personal circumstances, and so may not be
available to all Shareholders. The Directors have taken all
reasonable steps, based on the information available to
them, to ensure that the taxation benefits described will
be available to Investors. However, the eligibility for such

KAVKA 29