EIS schemes- any views?

[RichS]

My IFA today was talking about these to me. I am happy to take a fairly bullish attitude to risk and would be happy to tie up say £50,000 for 3-4 years. I'm a higher-rate tax payer and the idea of effectively getting the income tax back (or 30% anyway) appeals to me.

Risks: (i) obviously capital, but I'm told there are some consistent performers out there (need to research this!)
(ii) it seems like a fair bit of the "return" is actually "your tax you've paid, being given back to you". If these are high risk, I'd have thought they would have a better "real" return? Am I wrong here?

Need to do some reading/thinking I think!

Cheers,

Richard

[Newc]

You are right that with the EIS funds a significant portion of the projected returns is just your tax rebate, while the risk profile isn't particularly reduced.

If that's the key aspect for you look also at VCT funds, especially the fixed exit ones. VCTs have income relief, EIS have income and CGT which may be relevant to you.

With EIS investment I think you have to say "If I see none of this money back ever does it have a major impact on my finances?" and set your investment level accordingly.

If you want to do EIS as it's supposed to be (early stage money in startups) then look at Crowdcube, and see if any of the firms there have any appeal to you.