Q&As

If HMRC withdraws the tax relief from an enterprise investment scheme and they investigate the company and decide it doesn't meet the requirements of the scheme, what liabilities would financial advisors face who facilitate investment in these schemes?

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Published on LexisPSL on 09/11/2018

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  • If HMRC withdraws the tax relief from an enterprise investment scheme and they investigate the company and decide it doesn't meet the requirements of the scheme, what liabilities would financial advisors face who facilitate investment in these schemes?

If HMRC withdraws the tax relief from an enterprise investment scheme and they investigate the company and decide it doesn't meet the requirements of the scheme, what liabilities would financial advisors face who facilitate investment in these schemes?

If a purported scheme fails to meet the conditions for an enterprise investment scheme (EIS), it may be an unregulated collective investment scheme (UCIS) or a ‘close substitute’, and so a financial adviser could be in breach of promotion of UCIS/close substitute requirements. We would therefore point to Practice Note: Collective investment schemes—essentials. In this Practice Note, we refer to the fact that Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001 (CIS Order), SI 2001/1062, Sch, para 2 excludes from the definition of a CIS ‘enterprise initiative schemes’. These are arrangements where the property to which the arrangements

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