The EMV Capital Evergreen EIS Fund - Enterprise Investment Scheme
The EMV Capital Evergreen EIS Fund is a discretionary portfolio which makes tax-efficient investments into exciting EIS Qualifying Companies. Through our UK EIS fund, our aim is to support our investors in growing their wealth while simultaneously supporting the development of high-growth potential businesses in the UK.
Our experienced team intelligently spread investment capital across a diversified portfolio of strategically selected companies in the deep tech sector. We identify, support and expand Seed and Series A/B investment opportunities in the life science, sustainability and industrials sectors.
Artificial Intelligence and Robotics
Why should you invest in the EMV Capital Evergreen EIS Fund?
EIS investors can receive a mix of upfront and ongoing tax reliefs. Here are the main benefits of EIS Investment opportunities:
Up to 30% income tax relief
You may be eligible to claim 30% income tax relief on investments of up to £1 million in the current or previous tax year, or up to £2 million if at least £1 million is invested in knowledge-intensive companies.
Investing in an EIS fund can be a tax-advantageous way to supplement other long-term investments, such as a pension fund or ISA, if you have reached the maximum contribution limits for those accounts.
Capital gains deferral
Additionally, you may be able to defer paying capital gains tax on any realised gains for up to three years before or one year after the allocation of your EIS shares.
Inheritance tax relief
If you hold your shares for at least two years and they remain in your possession at the time of your death, 100% of your investment may qualify for inheritance tax relief.
Loss relief on exit
While the potential for growth in the EIS fund, which invests in early-stage or start-up businesses, is significant, and any capital gains are tax-free, you may claim up to 45% loss relief on your investment if it does not perform as expected. This loss relief may be applied to offset income tax at your marginal rate or capital gains.
Are you new to the EIS?
What is EIS Investment?
The EIS Scheme (Enterprise Investment) is a government scheme that was designed to help early-stage businesses in the UK raise capital and expand.
EIS-qualifying investments allow investors to grow their own wealth while also supporting the development of high growth potential businesses in the UK. Private investors who invest in EIS-qualifying companies may be eligible for significant tax benefits, including upfront income tax relief, tax-free capital gains, and loss relief on each investment that returns less than you put in.
Since its launch in 1994, more than 31,000 qualifying early-stage businesses have received £22 billion in investments (National statistics published by HMRC on 29 May 2020).
The EMV Capital Evergreen EIS Fund is designed for private investors who understand the risks of investing in unlisted investments, typically a UK higher-rate taxpayer, over 18 years of age, normally advised by an FCA authorised adviser or a retail client that is a high net worth or sophisticated client. We also welcome EIS investors who may also be a professional client or an eligible counterparty. EIS Investors should be able to lose all funds invested.
What kind of companies qualify for EIS?
The EIS scheme helps early-stage businesses that may have difficulty obtaining funding by offering them a financing option. To qualify, companies must be trading businesses that are not publicly traded on any stock exchange, but they can be listed on AIM. These qualifying companies are usually privately held, with assets under £15 million and fewer than 250 employees, although there are now more flexible criteria for knowledge-intensive companies.
Companies in knowledge-intensive industries, which focus on research and development as their primary business activity, receive favourable treatment and are eligible for additional EIS funding.
Some businesses, such as those involved in real estate, commodities, or stocks, and those with strong financial support or long-term revenue contracts, are not eligible for EIS funding.
What makes EMV Capital different?
- Award Winning: EMV Capital is an award-winning VC investor specialising in early stage high-growth deep tech companies
- Exciting Companies: We look for entrepreneurial teams who are building exciting B2B technology-based businesses that have the potential to scale in large proven markets
- International Reach: The Fund’s Investee Companies will have access to EMV Capital’s international network of experts, investors and corporates, enabling Investee Companies to potentially access investors and markets beyond the UK
- Unique Deal Selection Methodology: We make use of a transparent and consistent method for deal evaluation and selection
- Board Representation: Our EIS Fund will always look to place an experienced executive as a director or observer on the Board of the portfolio companies.
- Co-Investment Opportunities: As an EIS investor, you may have the opportunity to invest additional capital into the Fund’s portfolio outside of the Fund structure.
Meet our portfolio
Frequently asked questions
The maximum amount that can be invested in Enterprise Investment Scheme (EIS) investments is £1 million per tax year, or £2 million if anything above £1 million is in ‘knowledge intensive’ investments. It is possible to invest more, but EIS investors will not qualify for income tax relief on the excess, although they will still qualify for capital gains deferral and inheritance tax relief. Income tax relief can be carried back to the previous tax year if desired. The minimum commitment in EIS investment opportunities varies depending on the investment manager, but it is typically around £10,000.
The Enterprise Investment Scheme (EIS) is a high-risk investment option intended for sophisticated investors with a long-term outlook and a desire to invest directly in fast-growing British companies. It is suitable for those who do not need to generate income from their investment and are willing to commit their capital for an extended period of time. EIS may be particularly attractive to investors looking to defer tax on a capital gain from selling a business, manage a large income tax bill, or reinvest a tax-free lump sum from a pension, as start-ups can be an attractive asset class in these circumstances. It is important to note that investing in start-ups carries inherent risks. Find out more about the benefits of EIS here.
There are two options for investors looking to purchase shares in companies that qualify for the UK EIS funds: investing in a single company or investing through a specialist manager. Investing in a single company involves researching and selecting the specific company to invest in, while investing through a specialist manager involves entrusting the investment to a professional who will invest in a portfolio of qualifying companies on behalf of multiple investors. This option may offer benefits such as ongoing oversight of the portfolio companies, the potential to influence board-level decisions, and expert guidance in negotiating an exit strategy. EIS investments through specialist managers can be structured as either approved or unapproved portfolios/funds. The main difference between the two is the timing of when EIS investors can claim tax reliefs. Approved EIS funds have additional requirements set by HMRC, including the requirement to invest at least 80% of the funds in knowledge-intensive companies within two years and to invest 50% of the funds within the first 12 months of the fund closing, followed by an additional 40% within the following 12 months (90% within two years).
Investing in companies that qualify for the UK’s EIS funds can offer investors the potential for high growth, tax reliefs to compensate for some of the risks, the opportunity to support young and innovative businesses, diversification of their investment portfolio, complementary long-term investments and tax planning opportunities. However, it is important to note that EIS is a high-risk investment and EIS investors may not get back the full amount they invest.
The date that shares are allotted in an Enterprise Investment Scheme (EIS) investment, rather than the date of investment, usually determines the investment date for tax purposes. Investors can claim income tax relief after their shares are allotted and they receive their EIS3 certificate, which can take around six months to be issued. However, for approved knowledge-intensive funds, the tax relief can be claimed for the tax year the fund closes, but only once the investor receives the EIS5 certificate, which may be up to 24 months after the fund closes. Read more about EIS tax relief.
EIS portfolios are typically allotted over the course of a year, but it can take 12-18 months from the time of investment. Single company EIS offers often have a closing date, which can be a set date or the point at which the pre determined fundraising target has been reached. Shares are typically allotted shortly after the offer closes. For approved knowledge-intensive EIS funds, the investment date for income tax purposes is the date the fund closes.
EIS investment funds have a carryback facility which refers to a tax relief option available to investors who participate in an Enterprise Investment Scheme. Under the EIS carry back rules, an EIS investor can apply all or part of their EIS investment against their tax liability for the tax year preceding the investment year. This means that an investor can claim tax relief for their EIS investment in the previous tax year, which can result in a reduction of their tax bill.
For example, if an investor makes an EIS investment in March 2023, they can choose to carry back the tax relief to the 2022/23 tax year (if they had taxable income in that year) rather than claiming it against their tax liability for the 2023/24 tax year. The carry-back option can be particularly beneficial if the investor’s taxable income in the previous tax year was higher than in the year of the investment.
This option is only available if the investor has sufficient EIS allowance in the tax year to which they are carrying back.
Unlike Venture Capital Trusts (VCTs), the returns from Enterprise Investment Scheme (EIS) investments are the result of capital growth as opposed to dividends payments. Each EIS offer will typically include a target return, which is a goal rather than a guarantee. Target returns can vary significantly, ranging from around 1.3 times to over 10 times the money invested. Higher target returns often indicate higher risks.
EIS investments, like all investments, carry the risk that the value and income from them may fall as well as rise, leading to the possibility of getting back less than the amount invested. This risk is greater with EIS investments because they are in small companies, which are more volatile and more likely to fail than larger companies. As a result, EIS investments are long-term investments that are not suitable for everyone, but are intended for high net worth or sophisticated investors who have no need for immediate liquidity and can withstand the potential of a total loss. In addition, EIS investments are less liquid than other stock market investments because there is no recognised market for these shares, making them harder to sell. To retain all the tax reliefs associated with EIS investments, investors must hold the investment for a minimum of three years and the companies must retain their qualifying status. Otherwise, investors may have to pay back the income tax relief they have received. It is important to note that the tax and product rules mentioned here are current, but may change in the future. Tax benefits depend on individual circumstances.