Downing Growth EIS Fund 3

Closing date extended to 29 June 2012

The closing date for our EISs has been extended to midday on 29 June 2012.

 

Introduction

Downing Growth EIS Fund 3 will seek to provide Investors with the opportunity to invest in small UK trading companies and to benefit from the attractive Enterprise Investment Scheme tax reliefs, including 30% income tax relief on the amount subscribed, IHT relief after two years, and CGT deferral relief, subject to circumstances and a three year holding period.

 

How to apply

In order to invest please read the Information Memorandum and then complete the Application Form and return it to Downing:

Reviews

 

Minimum and maximum subscription & closing date

  • Minimum subscription: £20,000

  • Maximum subscription: no maximum, subject to the maximum fund size being reached

  • Closing date: 29 June 2012
 

Key points

  • Tax benefits: Obtain and maintain EIS tax benefits.

  • Exit: Provide an exit within approximately four to eight years from the date the underlying investments are made.

  • Growth: Focus on capital appreciation.
 

Investment strategy

Downing Growth EIS Fund 3 is seeking to take advantage of the reduced level of finance, in particular bank finance, available to small growing companies. Overall, the Manager is targeting capital growth by investing in Qualifying Companies which have the potential to see a significant increase in profits.

The Manager anticipates investing in tranches of £250,000 to £2 million in four to six Qualifying Companies, subject to the level of funds raised. These investments are expected to be made between April 2012 and October 2013.

The Manager will seek exits from the Fund's investments from the fourth anniversary of the investments being made with a target of achieving all exits before the eighth anniversary of the investments being made.

 

Key tax reliefs

  • Income tax relief: 30% income tax relief on the amount subscribed to the Fund is available on an aggregate maximum investment of £1 million per Investor per tax year, provided the investments in Qualifying Companies are held for the Three Year Period. In addition, tax relief on subscriptions may be carried back to the previous tax year, subject to that year's annual limit, which will also attract income tax relief at 30%.

  • Tax-free capital gains: Tax-free capital gains on Qualifying Investments held through the Fund.

  • Inheritance tax relief: The value of investments held through the Fund for two years or more at the date of death should qualify for IHT relief provided the Qualifying Companies continue to undertake a Qualifying Trade. Under current legislation, proceeds received on exit from a company undertaking a Qualifying Trade can be re-invested into IHT qualifying companies to maintain the IHT-free status.

  • CGT deferral relief: The opportunity to defer capital gains realised up to three years before the date investments are made in the underlying EIS companies.

  • Loss relief: A loss on any Qualifying Investment in the portfolio, irrespective of the overall performance of the portfolio, can be offset by individuals against income or capital gains.

CGT deferral relief and inheritance tax relief are not limited, other than by personal circumstances.