Platform provides Prime’s clients with an investment opportunity to secure strong returns enhanced by significant tax relief benefits
Focus on HNW/family offices to access their significant wealth to help increase SEIS/EIS funding
Prime Wealth Group, a leading advisory broker on a range of savings and trading products specialising in shares, FX and CFDs for retail and institutional investors, is broadening its current offering with the launch of a new platform for Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS).
Prime is targeting some £5 million to be invested through the new platform over the next 12 months, with the aim of providing the firm’s clients with a number of investment opportunities to generate superior returns boosted by significant tax relief.
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Prime is currently using the EIS/SEIS platform to secure £150,000 for Metall-FX an early-stage company. Metall-FX, a group of experts specialising in the application of real metal finishes to a variety of surfaces, has already been commissioned by a number of the world’s top hotels, exclusive retailer Harrods and for multiple Hollywood films including Harry Potter.
Prime is tapping strong demand from a range of IFAs, wealth advisers, HNWIs and, in particular, family offices, as its key shareholder, leading asset manager Omada Capital, works with a number of influential family offices, which are increasingly looking at this area. Working alongside Denning Legal, a legal and accounting firm specialising in this area, Prime is seeking to place an exciting pipeline of deals from the new platform.
Most immediately, Prime is scheduling a series of deals from the film production sector. Patrick Butler, Prime’s CEO, is keen to distinguish this structure from other tax-driven film finance deals which have not been accepted by HMRC. Some of these involved establishing partnerships for the sole purpose of accumulating tax breaks or tax credits and VAT rather than driving investment. In contrast, SEIS and EIS, by their very nature, are approved by the Revenue, and assuming the rules are followed, the tax relief is automatic.
Both EIS and SEIS offer very attractive opportunities for investors. SEIS, in particular, have been lauded, with the UK business media describing it as ‘the world’s most generous investment scheme’.
Under EIS, companies are able to accept up to £5 million of investment, while individual investors are able to buy shares up to £1 million and receive up to 30% in tax relief on the cost of the investment. and since the scheme was launched some 10 years ago, nearly £10 billion has flowed into growth companies.
SEIS aims to specifically help young, start-up companies raise equity finance and so far SEIS has helped over 1000 companies, raising over £80 million from private investors. Tax relief of 50% on the initial cost of the shares is available on an investment of up to £100,000 in a single tax year.
Research has also shown, such as a study by leading entrepreneurs group E2Exchange, that there is insufficient awareness among UK entrepreneurs of EIS/SEIS schemes – over 25% had not heard of EIS according to the survey and 35% were not aware of its benefits- and not enough entrepreneurs are using them because of this so new firms moving into this area and new platforms help to build profile and hopefully will boost investment through EIS/SEIS schemes.
SMEs still struggling to secure funding from banks – net lending to SMEs fell sharply last year – with the big four accounting for 80% of the market. So smaller firms and entrepreneurs are even more reliant on securing equity rather than debt capital to finance their businesses and new EIS/SEIS platforms and commitments bring much needed additional funding to the growth business sector.
Patrick Butler, CEO of Prime Wealth Group, commented:
“We are delighted to have launched this new EIS/SEIS platform, which gives our clients an excellent opportunity to secure strong potential returns enhanced by significant tax relief benefits. EIS and SEIS are among the most generous investment schemes in the world and they should probably be a core part of any well diversified wealth portfolio. As well as hoping to help our investors achieve great returns we also hope the new platform will help direct more much-needed funding to hard-pressed growth businesses, which are still struggling to source finance despite popular funding options such as crowd funding. With our platform, we aim to assist growth businesses quicken the pace of their expansion and help drive the UK’s economic recovery.”