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Glint Special Report: US interest rates rise for first time since 2018

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Special Report US Interest Rates

• The US central bank confirmed market expectations by raising the main interest rate by 0.25%.
• US Federal Reserve funds rate is now 0.25%-0.50%.
• This might be the first of at least four further rate rises this year, and more in 2023.
• Borrowing costs for everything from credit cards to mortgages are headed higher.

 

In the past 12 months, the annual inflation rate in the US has moved from an official 2.62% to 7.9% – a 40-year high. Jerome Powell, chairman of the US Federal Reserve, and Janet Yellen, US Treasury Secretary, have shifted their narrative about inflation. A year ago they called it ‘transitory’. Yellen warned last week that Americans will probably see another year of what she called “uncomfortably high inflation”.

Putting up interest rates is a central bank’s main tool when it comes to trying to prevent inflation from spiraling beyond control. But this inflation is largely imported and probably beyond the control of anything the US Fed can do. The fall-out from the war in Ukraine has pushed energy and grains prices to record levels; China’s zero-Covid policy continues to disrupt supply chains. The risk is that making borrowing more expensive could throw the US economic recovery off-course, while failing to cool red-hot prices. According to a note to clients from Bank of America, for the US “economic growth and profit expectations are recessionary”. Kristalina Georgieva, managing director of the International Monetary Fund (IMF) has Tweeted that the “entire global economy will feel the economic ‘ripple effects’ of the war in Ukraine, with slower growth and faster inflation”.

It’s commonly held that rising US interest rates are bearish for gold, but in fact there is little correlation between interest rates and the gold price; the 1980s saw declining interest rates and a bear market in gold, while in much of the 1970s gold prices rose, in tandem with rising interest rates. According to the World Gold Council, there is usually a negative correlation between gold and interest rates. Higher interest rates are thought to push gold lower because of increased competition from higher-yielding investments.

Gold has traditionally been regarded as a safe haven asset at times of intense uncertainty and anxiety, such as now. The Dollar price hit $2,070 after Russia launched its invasion of Ukraine; Goldman Sachs has raised its price forecast for gold to $2,500 over the next six months, $450 higher than previously. Glint, the global gold-based payments platform makes gold easier: simpler to access, simpler to share and for the first time ever, a viable option to spend.

While we strongly believe that gold is the fairest and most reliable currency on the planet, we must point out that it isn’t 100% risk free. We have seen a steady increase over time but the value of gold can fall, which means the purchasing power of the customer can also fall.

Jason Cozens, Founder & CEO of Glint, says: “The markets have long been expecting this interest rate rise by the US Federal Reserve. This rate rise is probably just the first in a sequence that will push the US base rate to 2%, which historically is still a very low level. The Fed is in a very uncomfortable place. If it tightens credit and the money supply the US might face a severe recession; if it doesn’t, it may be criticized for failing to address inflation – even though the causes of this inflation lay beyond its shores”.

“We are living through deeply troubling and uncertain times. The Dollar’s status as the international reserve currency has been further chipped away by the news that Saudi Arabia may price some of the oil it sells to China in Yuan”.

“Gold will become increasingly important as an alternative to fiat currencies; the turbulence of today merely reinforces that. Glint has a vision of a global, gold-based alternative to banking, payments and money. We have the capacity and opportunity to build a significantly scalable financial eco-system, connected to, but outside of the existing banking and cryptocurrency systems”.

 

ENDS

 

Press information

About Glint
At a time of extraordinary monetary policy and when trust in currencies, banks and existing payment systems has been eroded, Glint helps us move to a more stable global economy. Glint is bringing reliability, independence, choice, and control to clients, by reintroducing the most universally trusted form of money, Gold.

Glint Pay Ltd. (glintpay.com) is a fintech company, based in London, Boulder (US) and Tokyo, that uses gold as an alternative global currency to enable its clients instantly to buy, sell, save, spend, and send their physical gold and other currencies, through the Glint Mastercard® and Glint App.

Glint offers no credit facilities, it allows users to transfer, receive and save real gold, which is secured in Brink’s vaults in Switzerland.

Glint is able to issue cards to clients around the world and can open accounts in over 200 countries. With more than 90,000 registered users, Glint has completed over $300million worth of transactions to date.

Glint is authorised and regulated by the UK’s Financial Conduct Authority which has given permission for Glint to issue electronic money (e-money) and provide payment services (FRN 900657).

Gold is not regulated by the FCA. However, Glint’s clients know their gold is secured in a Brinks Vault in Switzerland, insured by Brinks with Lloyds of London and their policy covers the replacement value of Glint client’s Gold as held in their vault.

The Glint card is issued in the UK by Glint Pay Services Ltd pursuant to licence by Mastercard International Inc.

Glint is a U.S.-based authorized Card Program Manager. Funds are held at Sutton Bank, Member of the Federal Deposit Insurance Corporation (FDIC), in an FDIC-insured account.

Glint Pay Inc. employs effective Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and fraud prevention systems and controls to mitigate and combat risks.

Whilst we strongly believe that gold is the fairest and most reliable currency on the planet, we obviously need to point out that it isn’t 100% risk free. Whilst we have seen a steady increase over time, the value of gold can fall, which means the purchasing power of the customer can also fall.

 

Press Release: Glint strikes gold, welcoming Sibanye-Stillwater as major shareholder

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Press Release Sibanye Investment

Glint – The global gold-based payments platform, with offices in the USA, UK and Japan, this week received an equity investment from one of the world’s largest producers of precious metals. This partnership seeks to connect sustainable sources of gold to easy, everyday money.

• Gold-based FinTech receives substantial investment from leading precious metals producer to support accelerated growth.

• JSE and NYSE listed Sibanye-Stillwater is a significant global producer of precious metals with a focus on sustainability. 

• This partnership of a disruptive FinTech and a leading precious metals producer, leads the way in gold-based alternative currencies.

Glint’s unique fusion of cutting-edge technology and real, allocated gold, instantly enables its client’s full access to the most reliable form of money. Glint makes gold easier: simpler to access, simpler to share and for the first time ever, a viable option to spend.

Sibanye-Stillwater (https://www.sibanyestillwater.com)

Sibanye-Stillwater is a multinational mining and metals processing Group with a diverse portfolio of mining and processing operations, projects and investments across five continents. The Group is also one of the foremost global PGM auto catalytic recyclers and has interests in leading mine tailings retreatment operations.

Jason Cozens, Founder & CEO of Glint, www.glintpay.com , says: “I’m delighted to be able announce this significant investment from Sibanye-Stillwater that will enable Glint to considerably accelerate our planned growth and strategic development”.

“What we’re building here at Glint is special. We are experiencing rapid but sustained growth to deliver our vision of a global, gold-based alternative to banking, payments and money, and we have both the capability and opportunity to build a significantly scalable financial eco-system, connected to, but outside of the existing banking and cryptocurrency systems”.

Neal Froneman, CEO of Sibanye-Stillwater commented “This partnership with Glint provides Sibanye-Stillwater with the ability to support new end markets for gold on an innovative, digital and highly regulated platform, backed by physical gold under the supervision of a world-class regulator in Switzerland”.

ENDS

 

Press information

About Glint
At a time of extraordinary monetary policy and when trust in currencies, banks and existing payment systems has been eroded, Glint helps us move to a more stable global economy. Glint is bringing reliability, independence, choice, and control to clients, by reintroducing the most universally trusted form of money, Gold.

Glint Pay Ltd. (glintpay.com) is a fintech company, based in London, Boulder (US) and Tokyo, that uses gold as an alternative global currency to enable its clients instantly to buy, sell, save, spend, and send their physical gold and other currencies, through the Glint Mastercard® and Glint App.

Glint offers no credit facilities, it allows users to transfer, receive and save real gold, which is secured in Brink’s vaults in Switzerland.

Glint is able to issue cards to clients around the world and can open accounts in over 200 countries. With more than 90,000 registered users, Glint has completed over $300million worth of transactions to date.

Glint is authorised and regulated by the UK’s Financial Conduct Authority which has given permission for Glint to issue electronic money (e-money) and provide payment services (FRN 900657).

Gold is not regulated by the FCA. However, Glint’s clients know their gold is secured in a Brinks Vault in Switzerland, insured by Brinks with Lloyds of London and their policy covers the replacement value of Glint client’s Gold as held in their vault.

The Glint card is issued in the UK by Glint Pay Services Ltd pursuant to licence by Mastercard International Inc.

Glint is a U.S.-based authorized Card Program Manager. Funds are held at Sutton Bank, Member of the Federal Deposit Insurance Corporation (FDIC), in an FDIC-insured account.

Glint Pay Inc. employs effective Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and fraud prevention systems and controls to mitigate and combat risks.

Whilst we strongly believe that gold is the fairest and most reliable currency on the planet, we obviously need to point out that it isn’t 100% risk free. Whilst we have seen a steady increase over time, the value of gold can fall, which means the purchasing power of the customer can also fall.

Press Release: Inflation at multi-decades high drives greater gold buying with Glint

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Press Release Gold Balance

• Consumer inflation has everywhere been on the rise for the past 12 months.

• In the US and the UK it’s now at its highest since 1982.

• Glint clients have responded to the debasement of their fiat currencies by inflation by increasing their gold holdings by almost 30% since March 2021.

Glint, the global gold-based payments platform, with offices in the USA, UK and Japan, reports that it has observed a distinct correlation in the past 12 months between the rise in inflation in the US and UK and an increase in the amount of gold bought by its clients.

In March 2021, the annual inflation rate in the US was an official 2.62%, and in the UK 0.74%. The average amount of gold held in Glint accounts by clients in both countries was, in that month, more than 47 grams. Since that date the annual inflation rate in the US has risen to 7.5% and in the UK to 5.4%. In both countries the average amount of gold in client accounts has risen to more than 61 grams.

Glint makes gold easier: simpler to access, simpler to share and for the first time ever, a viable option to spend.

Jason Cozens, Founder & CEO of Glint, www.glintpay.com , says: “There can be no better proof of humanity’s confidence in one of gold’s most important characteristics – a defense against the poison of inflation – than that our clients have increased their gold holdings as inflation has taken a hold. We are living through deeply troubling, deeply uncertain times. Gold will become increasingly important as an alternative to fiat currencies; the turbulence of today merely reinforces that.

“What we’re building here at Glint is special. We are experiencing rapid but sustained growth to deliver our vision of a global, gold-based alternative to banking, payments and money, and we have both the capability and opportunity to build a significantly scalable financial eco-system, connected to, but outside of the existing banking and cryptocurrency systems”.

 

ENDS

 

Press information

About Glint
At a time of extraordinary monetary policy and when trust in currencies, banks and existing payment systems has been eroded, Glint helps us move to a more stable global economy. Glint is bringing reliability, independence, choice, and control to clients, by reintroducing the most universally trusted form of money, Gold.

Glint Pay Ltd. (glintpay.com) is a fintech company, based in London, Boulder (US) and Tokyo, that uses gold as an alternative global currency to enable its clients instantly to buy, sell, save, spend, and send their physical gold and other currencies, through the Glint Mastercard® and Glint App.

Glint offers no credit facilities, it allows users to transfer, receive and save real gold, which is secured in Brink’s vaults in Switzerland.

Glint is able to issue cards to clients around the world and can open accounts in over 200 countries. With more than 90,000 registered users, Glint has completed over $300million worth of transactions to date.

Glint is authorised and regulated by the UK’s Financial Conduct Authority which has given permission for Glint to issue electronic money (e-money) and provide payment services (FRN 900657).

Gold is not regulated by the FCA. However, Glint’s clients know their gold is secured in a Brinks Vault in Switzerland, insured by Brinks with Lloyds of London and their policy covers the replacement value of Glint client’s Gold as held in their vault.

The Glint card is issued in the UK by Glint Pay Services Ltd pursuant to licence by Mastercard International Inc.

Glint is a U.S.-based authorized Card Program Manager. Funds are held at Sutton Bank, Member of the Federal Deposit Insurance Corporation (FDIC), in an FDIC-insured account.

Glint Pay Inc. employs effective Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and fraud prevention systems and controls to mitigate and combat risks.

Whilst we strongly believe that gold is the fairest and most reliable currency on the planet, we obviously need to point out that it isn’t 100% risk free. Whilst we have seen a steady increase over time, the value of gold can fall, which means the purchasing power of the customer can also fall.

Glint Special Report: Sound money and social stability

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We see Glint as the key to unlocking the security of gold as sound money, money that can be used by everyone in their daily life. While gold goes up and down in price, over time it has proved a reliable store of value.

Thus, we are always on the look-out for cogent, intelligent and persuasive articles which give a provocative analysis of the current practices of central banks, those bodies which have the most profound influence over our fiat money system.

For that reason, we are delighted to publish here today an essay by Geoff Blanning. In his ‘Put the tools away now, please’ Geoff, who worked in the City for 32 years as an investment manager, savages the quantitative easing policy pursued by the Bank of England (and other central banks) and warns that the creation of vast amounts of new money “represents a debasement of every existing pound in your pocket and mine”. Geoff lays out how higher inflation inevitably follows the extraordinary amount of new money which has been injected into the global system.

Read Geoff Blanning’s ‘Put the tools away now, please’  White Paper here:
https://glintpay.com/wp-content/uploads/2021/09/Geoffrey-Blanning-Put-the-tools-away-now-please.pdf

Listen to the podcast here on Spotify: https://open.spotify.com/show/3QQoOfUpMqozX1Am2VoLRo

Watch our YouTube film here: https://youtu.be/qcUg1OSu8xk

Ask Glint Anything: Update on your Crowd Funding Investment

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Crowd Funding Ask Glint Anything

A number of you have asked about our recent Crowd Funding campaign, here’s a typical example: “I recently invested some money via Seedrs on the back of the GLINT crowdfunding campaign and am still waiting for final confirmation of the purchase – my balance is still showing in Seedrs. Could you please give me an update on my investment?”

Who better to answer that than our Financial Director, Sen Ramachandran? Sen says: “Glint’s crowdfunding campaign was the first in the world to involve synchronised US and UK platforms. The closing process has therefore involved reconciliations across more than one party, a new shareholder agreement, plus input from the Future Fund, who invested in Glint via a convertible loan last year. This complex reconciliation has taken longer than expected but I am pleased to tell you that we are nearly there and expect it to complete in the next couple of weeks. Thanks for showing your confidence in our mission to democratise money by making gold a real alternative currency, to be used in everyday purchases. We can’t wait to welcome you into our shareholder community!”

Take this chance to find out more about what’s happening at Glint. Put any question you have to our leadership team and they will respond. Each month we’ll publish a question and our response, of course.

Do keep sending me your questions, to [email protected]

Ask Glint Anything: Query from one of our readers on Capital Gains Tax

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“Say, I buy £1000 worth of gold and hold it on my Glint card, the price goes up so the value on my card is now £1500. I buy items using the card, but gold still rises, how does one deal with capital gains tax on the annual tax return? How do you calculate it? Does the reverse apply if gold drops, can I declare this as a loss against future gains?”

Reply from Sen Ramachandran, Finance Director

Good question, first of all, I should point out that Glint does not offer advice on tax matters and so this specific question: “how does one deal with CGT on the annual tax return” would be a question for your tax advisor.

However, to help explain what happens with Capital Gains(CGT), Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. It’s the gain you make that’s taxed, not the amount of money you receive.

Example: You bought gold for £1,000 and sold the gold to fiat (local currency) / or made a purchase using Gold for £1,500. This means you made a gain of £500 (£1,500 minus £1,000). It is the gain which would be taxable for the purposes of the CGT calculation. A capital loss occurs when a purchase is made (gold sold) with a decrease in asset value.

We would also refer our UK-based clients to HMRC’s website which provides further details on Capital Gains Tax.
https://www.gov.uk/capital-gains-tax

What’s Your Gold Story: Ian Cockerill

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Ian Cockerill is a British-born geologist, mining engineer and former president and CEO of Gold Fields Ltd, as well as holding senior executive roles with Anglo American plc. He is currently non-executive chairman of Polymetal, the FTSE 100 listed Russian gold producer and a non-executive director of BHP Ltd.

“I guess my real introduction to gold started back in the 1970s when I was studying geology at the University of London. Having the star sign of Leo, it’s hardly surprising I was intrigued by the yellow metal, but it was during the 70s, when Nixon made the fateful announcement of decoupling the dollar from Gold. In all honesty, at the time, I had no clue this was such a momentous call but reading the papers then maybe I had a subconscious inkling it was going to become really big news.

My fascination with gold led to a lifetime career in the mining business, covering a variety of minerals and metals, but predominantly focused on gold. I’m no ‘Flat earth, Montana revivalist’ when it comes to gold but I appreciate its enduring characteristics, its physical beauty, and its historic value as a store of wealth. Whilst it faces increasing competition from the likes of cryptocurrencies, there’s no doubt gold should form an important part of anyone’s long-term investment portfolio and with the help of Glint, it’s going to transform a once “barbarous relic” into an important component of the day-to-day monetary system”.

From The Engine Room: Emmanuel Ide

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We are delighted to welcome to Glint our new Head of Engineering, Emmanuel Ide. Emmanuel will be responsible for growing our world-class product team and continuing to enhance the user experience as well as deliver new features for our clients. This hire is integral to Glint fulfilling its growth plans and expanding market share.

Emmanuel has 15 years leadership experience in technology and product, working for B2C and B2B start-ups and scale-ups. He was most recently, Chief Technology Officer at Curio, a media platform for high-quality audio journalism. As CTO, Emmanuel was responsible for founding and growing both the product teams and data teams to support the rapid growth of the company. During his tenure as CTO, Curio successfully closed a $9m Series A funding round in September 2020.

Prior to Curio, Emmanuel demonstrated a strong record of building and managing high performing teams and successful product, holding roles as Head of Technology at online accountancy firm Crunch, CTO at art therapy non-profit Chroma, Head of Development at a business logistics specialist Quru, as well as software development roles at Motorola and Shop.com.

Emmanuel says: “Glint’s ambition to democratise gold and to give everyone an equal opportunity to prosper is inspirational. I’m proud to be joining such a talented leadership team with a deep knowledge of the industry and have a great opportunity to shape Glint’s future and establish it as a premier payments platform. I have the exciting role of building on and leading a dedicated team that are already working tirelessly to ensure that Glint’s platform provides our clients with the best possible user experience to allow them to take advantage of the alternative currency revolution”.

In welcoming Emmanuel, Glint’s CEO Jason Cozens, said: “Emmanuel brings fantastic expertise to Glint and we’re delighted to welcome him to the team. As a FinTech, we know the user experience of our platform is integral to our success and this is something that he will be overhauling over the next few months. It is something that our clients expect, and Emmanuel is the perfect hire to meet this challenge and lead the creation of a truly world-class mobile app and platform”.

Press Room: Glint in the news!

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It’s been another busy month at Glint with plenty of government announcements! Plus we’ve welcomed a new addition to our leadership team as Emmanuel Ide joins Glint as our new Head of Engineering. Emmanuel has great plans to transform the user experience of our platform – his appointment was covered in Finextra.

UK borrowing hit £19tn in February – up a staggering 1170% on the year – eroding the value of our savings even further. Jason’s commentary appeared in the Daily Express and MSN looking at what this could mean for our personal finances.

The UK saw one of its biggest political events of the year earlier this month as Chancellor Rishi Sunak presented the annual Budget to parliament. He announced that over £400bn had been borrowed to support the UK through the pandemic and it’s likely that we haven’t felt the worst of the financial impact yet! Glint’s commentary from Budget day was covered by Tech StartupsScottish Financial Review and Disruption Banking.

Jason met with Fintech Finance and his interview was published in The Fintech Magazine. During the interview, Jason discusses what led him to start Glint, why more clients are turning to gold through Glint’s platform and the long-term performance of gold.

In the UK, the Office for National Statistics announced the latest household spending statistics which hit the lowest level since 2015-16. Jason’s commentary on the announcement and how this impacts consumers and savers was published by The Fintech Times. He discusses how savers are forced to entrust even more of their wealth to banks as a result of historically low-interest rates, and the continued threat of negative interest rates later this year.

Jason’s article for Fintech Futures discussed the alternative currency revolution and the role of gold in securing our future financial security and taking control of our finances.

Democratising gold is one of the main reasons Glint was launched so we welcome anything that unlocks accessibility and allows consumers to take control of their finances. The World Gold Council joining the WealthiHer Network, which aims to promote female financial equality, is certainly something that should be applauded. Jason was asked for his thoughts on the partnership by Disruption Banking.

We all know that gold prices have dipped during 2021 but the long-term fundamentals that attracted us to gold still remain in place. Jason discussed some of the factors that are attracting increasing numbers of clients to gold and Glint with Disruption Banking.

Glint Special Report: Enterprise Investment Schemes (EIS) could offer tax relief – Guy Kelland reports

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We want you to have as much information as possible when considering investing in Glint, so we asked leading taxation expert Guy Kelland, to share his views on UK investors making an EIS qualifying investment into Glint’s Crowd Funding campaign.

Approaching tax year-end, many people’s thoughts will naturally turn towards tax-efficient investments and ensuring that pension contributions and ISA pots are topped up. But with limits on ISAs and increased restrictions on pensions, once these options are maxed-out the next question should be ‘what’s next?’

The answer could be Enterprise Investment Schemes or EIS’ as they are also known*

EIS’ are a decades-old tax planning tool regularly used by investors for a multitude of purposes. An incentive created and driven by the UK government, this well-established scheme encourages investment in early-stage growth focused companies focused on innovation.

For those who have heard of EIS’, they may know of them as high-risk investments. And it’s true, they are long-term investments in unquoted and illiquid stock. But with high risk can potentially come high reward – provided by both the significant target returns on such schemes and the generous tax incentives offered by the UK government to investors.

The tax reliefs on offer in an EIS can include:

– 30% Income Tax Relief – claimed against either your income tax liability for the current tax year or ‘carried-back’ to the previous tax year. This can be claimed against a maximum of £1M per year per investor (or £2M per year in ‘Knowledge Intensive’ companies that specialise in areas such as life sciences). But take note, you can’t claim back more than you’ve paid!

– Tax-Free Growth – any profits in an EIS are not liable to Capital Gains Tax (CGT)

– Inheritance Tax (IHT) Relief – for those more ‘seasoned’ clients who are starting to look at their IHT liability, if shares in these companies are held for a minimum of 2 years (and on death), the shares could potentially be IHT free.

– Loss Relief – an incredibly useful relief which is only available in an EIS. You would be investing in early stage companies with the ability for some fast growth, however, as they are new companies there is also the possibility that some could tank! With loss relief, if any companies in your investment portfolio do fail, you can potentially claim up to 45% back on this proportion of your investment**

– Unlimited Capital Gains Tax (CGT) Deferral – the payment of tax on a capital gain can be deferred when the gain is invested in an EIS.*** So if, for instance, you’ve sold something valuable such as a property, share portfolio, a wine collection or similar, and realised a gain in the last 3 years, you may be able to claw this CGT payment back and defer this payment for the life of the EIS investment. (Then we have some nifty tricks to chip away at this liability, potentially whittling it down to zero – speak to one of our advisers!)

And what’s in it for the government you may ask? There are some very impressive tax reliefs on offer and some will be suspicious as to why HMRC are being so generous. Investors will rightly feel uncomfortable with the thought of tax ‘evasion’ or tax ‘avoidance’ – this is neither – it is tax incentivised investing fully supported by the government and doing good for the British economy. Britain boasts an incredible variety of entrepreneurs, and EIS investment encourages and supports such innovation.

The EIS scheme was launched in the mid-90s by the government to encourage investment in early-stage companies that help to support the backbone of the UK economy. These fledging start-ups often struggle for investment and funding due to the high-risk nature of investing in a new company. However, that is precisely why the UK government offers generous tax advantages on such investments, as this reduces the financial risk for investors.

Investment in an EIS supports job creation, increases productivity and innovation, and boosts growth. So basically, for the government and HMRC – encouraging EIS investment is good business sense!

We have described the substantial returns and touched on the generous tax reliefs on offer via EIS investments, but there are specific nuances and very stringent rules that must be applied. EIS investing is a complex area and detailed knowledge is required to avoid the potential pitfalls of investing in this space. But there are many benefits, so if you think that this could be a useful tool for your situation and want to learn more, we’d love to talk to you about it!

*There are 2 other useful schemes that can be used for similar purposes – VCTs and SEIS – but in this blog we are focusing on EIS’ due to the varied and generous tax reliefs that are offered.

**relief varies according to tax bracket. 45% applies to additional rate taxpayers.

***and if you have claimed income tax relief also.

Risk warning: Tax relief depends on an individual’s circumstances and may change in the future. In addition, the availability of tax relief depends on the company invested in maintaining its qualifying status. Always seek advice from a qualified financial or tax adviser.

There are a few potential pitfalls, some of which are outlined below.

– Not claiming income tax relief. Unfortunately, not claiming income tax will mean that the gains on the EIS are then subject to CGT.

– Timing of the deployment of capital. Some EIS companies may take a year or more to deploy the capital into EIS qualifying companies, this could be an issue if income tax relief is to be carried back to the previous tax year.

– Investors can only claim back income tax they have paid! It may sound obvious but if you haven’t paid say £10,000 in income tax in the current tax year, you won’t be able to claim back more than £10,000 (but you carry back of course!).

– Exit too soon. If a company say floats on the market within the 3 year the client invested into the company then tax relief will be lost. Not always a bad thing but will depend on how much the investor will make to compensate for any lost tax relief.

– Loss of HMRC EIS approval, the companies must continue to participate in a qualifying trade for the three years following the share issue in order to maintain their EIS status.

Guy Kelland is a Chartered Financial Planner and Managing Director of Kellands Chartered Financial Planners. Guy is responsible for shaping the vision and strategy of Kellands. Previously a trader in The City, Guy founded Kellands Hale over thirty years ago.

Kellands (Hale) is a Chartered Financial Planning Practice, based in Hale, Cheshire. We give quality holistic financial planning and investment advice to both individuals and businesses in Cheshire and across the UK. Our Chartered status demonstrates our professional commitment to raising standards of knowledge, capability and ethical practice. It also helps to distinguish us from our competitors and peers. By offering a whole-of-market choice, we offer our clients the very best unbiased financial advice and ensure correct customer outcomes are achieved. Our aim is to help create, grow and protect our clients’ wealth and to work with them to formulate a financial strategy to meet their key financial goals. We have the resources to provide the research and due diligence required in-house, to deliver the very best whole-of-market investment solutions.

Kellands (Hale) Limited is authorised and regulated by the Financial Conduct Authority. The information contained therein should not be regarded as an offer or solicitation to conduct investment business and should not be viewed as personal financial advice, but instead, it is intended to provide information only as an overview of possible considerations or options.  Formal financial recommendations will be made in writing to you once the decision has been taken by you to formally appoint Kellands as your advisers and we have gained a clear understanding of your personal circumstances, needs and objectives.
Kellands (Hale) Limited (FCA Firm Reference number: 193498).