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Investors’ relief

Investors’ relief
Wednesday, January 30, 2019

Introduced in the last two years, Investors’ Relief was a big change to the tax and investment environment. Investors’ Relief can save each investor up to £1m in tax over the course of their lifetime.

Imagine a scheme which allows you to be taxed at the same rate as Capital Gains Tax Entrepreneurs’ Relief when you dispose of your shares. Imagine an EIS scheme with no maximum investment limit and no cap on the amount of shares you can hold.

That, with a few caveats, is Investors’ Relief and here is Panthera’s guide on what you need to know.

Taking out shares – how to qualify

For you to qualify, your shares must have been purchased on or later than the 6th April 2016 or the shares issued and subscribed for on or later than 17th March 2016.

There is no minimum or maximum number of shares you need to purchase to qualify for Investors’ Relief unlike with Entreprenuers’ Relief or EIS.

The shares you purchase must be newly-issued ordinary shares, entitle you to no preferential arrangements with the company, and be fully paid in cash. The shares cannot be listed on the Stock Exchange.

You must hold the shares directly and not via a personal services company. The shares you can buy can either be in the trading company or the holding company of a trading group.

HMRC will need to be convinced you have made the investment for genuine reasons and not to avoid paying tax.

In the year prior to and three years after share issue, you will disqualify yourself from relief if you receive any payment except for payments of £1,000 with no prior arrangement in place, dividends paid at commercial levels, and any rent, interest, or payment for assets made at commercial levels.

Panthera advice – Investors’ Relief only applies to incorporated businesses so you will not qualify for investments made in limited liability partnerships.

How long do you have to hold onto the shares?

You have to hold onto your shares continuously for a minimum of three years. Under the scheme, the earliest tax year in which you can make a disposal that qualifies for Investors’ Relief in the 2019/2020 tax year.

Can you be an officer or employee of the company you’re investing in?

Yes, but only six month after you’ve taken out your shareholding.

You can become an unpaid director from the time of investment and still qualify for relief, although you can still claim:

• expenses carried out on required duties needed for the performance of your director’s duties exclusively

• interest on a loan granted to the company at a commercial rate

• dividend payments at no greater rate than would be considered a normal return on investment

• being paid for supplying goods at a rate not higher than market value

• being paid rent on any property the company is occupying where the rent is reasonable and commercially justifiable

• being paid for qualifying services relevant to its trade but not managerial or secretarial work normally associated with directors.

After you’ve sold up

Investors’ Relief is a completely separate relief from Capital Gains Tax Entrepreneurs’ Relief and EIS schemes. It’s an up-to-£10m lifetime relief you can take advantage of.

To claim the relief, you need to complete the capital gains tax pages on your Self Assessment. You will be able to make a claim up to the first anniversary of the 31st January after the tax year you sell up.

Investors’ Relief - talk to an expert

As with the rules surrounding Capital Gains Tax Entrepreneurs’ Relief and EIS schemes, the Investors’ Relief scheme is complex and we’re here to help you navigate it. To find out more, please call 01235 768 561 or email

What our clients say

For us, there is nothing better than a happy customer. Here are just a few that let us know how much we mean to them.

Pete Dungey

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We found Panthera via our search for a Xero expert. We knew the software we wanted to use, and needed a forward-thinking accountancy partner who could get us up and running, and teach us the ropes moving forward. Tory and her team have always been on hand to answer our questions, and help us to grow as a business, particularly during periods of big change, such as becoming VAT registered. They are always on hand to alleviate any concerns and help to keep our records in order, which makes our year-end accounts an absolute breeze! Being based in Bristol, our relationship is entirely email based, alongside one consolidation meeting at year end - this keeps things simple, efficient and most importantly, hassle-free.

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The support and service we receive from Panthera Accounting is very good. Everything from regular meetings, a prompt e mail response and the transition of our Xero software (which we find very pro active indeed) has and is all remarkably efficient. We find Panthera talk our language and make any process as painless and easy as possible.

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An Asset to my Business!

The whole team at Panthera are great! Working with them has been a huge support to my growing business. They help me to understand the numbers I need to know. They give me technology solutions like Xero so that I can process things quickly and have access to my own figures. They are quick to reply, highly knowledgeable, nothing is too much trouble and as well as making sure that everything is compliant and on time, they are enthusiastic, professional and fun to work with.

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Working with Tory and the team at Panthera is an absolute joy - they provide a first class service on every level; from simple Xero issues through to more complicated tax enquiries, they’re always on-hand to help me get it right. I’m certainly not their biggest customer, but I’m always made to feel like their most important one.

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I would like to say that Panthera Accounting have helped me with my business accounts for more than 4 years now. They have consistently offered an excellent competitively priced service that works both professionally and in such a friendly way that I would highly recommend them to everyone considering using their services.

John Castle Ilexanna Limited & Birch Castle Homes Limited
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I had been with Mr Dunn for 20 years when upon his death Panthera took over the business. They now play a bigger part in the running of my business, they do all the stuff that has to be done but I don't like doing ie book keeping, VAT, wages, and returns. They are always there to answer queries and sort out issues and make sure all Tax deadlines are met. Their costs are fair, service is great and I have and would highly recommend them.

Jonathan Morrison Wallingford Builders
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Professional, friendly and personal service.

Panthera Accounting have gone above and beyond the call of duty to guide and support our Company. They offer a professional, friendly and personal service that can take the stressful and sometimes frightening feelings out of running a business. They have guided us through the working of Xero and have offered “teaching sessions” on the day to day running of the accountancy package. Our only regret is that we didn’t join their team earlier.

Pippa Scott Scott's Commercial Services Limited
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Tory and her team have provided a friendly, approachable and helpful service from the start. They have delivered a quality service, above and beyond anything I could have expected. Panthera, with the help of the Xero package, have taken the stress, strain and confusion out of managing my company and personal accounts. I look forward to working with them for many years to come.

Sara Southey Bluestones Garden Design
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Panthera are fantastic. Always professional, going the extra mile for their clients and delivering superb service. I recommend them all the time to my clients.

Tracey Miller Bigger, Brighter, Bolder BBB

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