Investment network Hotbed has launched a £10m Enterprise Investment Scheme (EIS) designed to give investors a 22% saving on their capital gains tax (CGT) in the two years to April 2008.
Hotbed’s EIS portfolio also offers investor income tax relief of 20% set against the value of the initial investment, capital gains free of CGT on investment held for more than three years, and the ability to defer any CGT liabilities on the disposal of other assets by investing capital gains in the fund.
The firm plans to raise up to £10m for the portfolio to invest £1.5-2m in up to seven companies. Under the scheme Hotbed will have two years to invest in companies, rather than the 12-month limit for a conventional EIS fund, which Hotbed says will give it greater flexibility to invest in high-quality, profitable businesses.
Chief executive Gary Robins said: “Private companies are no longer able to get the funding they need from banks and capital raising on AIM is currently on hold. We believe this will put us in a very strong position to attract high quality investment propositions in later stage, profitable companies at attractive prices over the next 12 months.”