20 Jun Some relief from remarkable times
Our Brexit negotiations are going the same way as a boiled egg – will it be hard, soft, open or closed? And our parliament is hanging by a thread. So why is market sentiment so benign? Fair enough for the FTSE 100, the impact of our pound continuing to tumble benefits the high participation of foreign earnings. But the FTSE 250, 350, AIM have looks largely impervious. Even stocks like Merlin Leisure – that you’d expect to be hit by the recent terrorist activities – have stayed buoyant. Look at the average P/E ratios and you have to conclude there’s a mighty degree of risk.
Not only that but the ability to shield investments from tax is generally decreasing – pension relief limits are getting topped out. Even ‘safe as houses’ buy to let has been hit by removing tax relief on mortgage interest, tighter restrictions on the wear and tear allowance and the stamp duty surcharge – all alongside, or probably partly causing, market nervousness.
But whilst the government changes tax regulations to make some investment classes less attractive, they have also been very actively making another asset class much more attractive (although not necessarily shouting about it).
The tax reliefs available for very early stage investments, through the Seed Enterprise Investment Scheme (SEIS) include 50% income tax relief; 50% capital gains tax re-investment relief; 100% inheritance tax relief; 100% capital gains tax free gains and loss relief.
Our job is to help those investors to not just enjoy the tax reliefs but also to ‘stack the odds of seed investment‘ to deliver the best returns on investment. We run The Start-Up Series – the UK’s largest seed funding competition and have very deliberately designed it to help mitigate the risks of early stage investments and deliver healthy returns:
- a widely publicised competition, promoted by startups.co.uk (the UK’s largest independent online research for anyone starting or building a business). It creates a high quantity of deal flow from which to select potential investments.
- a sophisticated distillation process conducted by highly commercial, retail, brand, marketing & innovation experts and including plenty of face time with entrepreneurs uncovers businesses with the greatest potential at the most attractive valuations.
- expert oversight of the investments by experienced and successful entrepreneurs help founding teams to avoid pitfalls, reduce risk and accelerate growth.
- a well-chosen portfolio creates diversification and the discipline of the competition timings create predictable timings for tax reliefs.
Our Start-Up Series SEIS Fund One has already invested £600k in 4 new businesses. And 4 additional businesses are lined up for investment over the next few weeks, subject to due dilligence. Please click here to find out more about the way we attract, select and fund high performing investments.