ALTERNATIVE INVESTMENT ZONE
The aim of the Alternative Investment Zone is to help financial advisers and qualifying investors understand the opportunities offered by alternative investments and to locate authorised alternative investment promoters that offer a range of alternative investment opportunities for potential investors. Once purchased, alternative investments can be held or recorded by investors in their Platform One portfolios.
In particular, the Alternative Investment Zone provides a portal to find information on EIS and Seed EIS investments, and BPR companies. It also provides information on the Income Bond ISA as an alternative to the cash ISA and for holding cash in a Stocks & Shares ISA.
Peer to Peer (P2P) opportunities for SIPP investors will also be added to the Alternative Investment Zone soon.
EIS and Seed EIS investments are now very attractive to qualifying HNW investors due to the tax advantages they offer. These include both income and capital gains tax benefits.
The EIS and Seed EIS schemes are also important to new, small and medium sized businesses as they now provide the only source of sensible funding available to such companies. It is the UK government’s objective to promote these schemes as a replacement to business funding that is no longer available from UK banks. The EIS and Seed EIS schemes also therefore play a vital part in the continued support for the UK economy.
Business Property Relief (BPR) tax benefits apply to investments in unquoted trading companies and are particularly advantageous to older investors with a potentially high Inheritance Tax (IHT) liability. Platform One offers several BPR authorised providers that advisers and qualifying investors may choose from. These can be held in the Platform One client portfolios.
The Income Bond ISA is a new service that will provide qualifying investors with the ability to obtain good rates of income on relatively secure bond investments. This will provide a low risk, income yielding alternative to the low interest rates currently offered on cash within a Stocks & Shares and in a Cash ISA. More information on the Income Bond ISA will be available shortly.
Key to the Platform One service is a unique consolidated portfolio that enables advisers and clients to manage and view their investments. This includes Alternative Investments as well as standard and specialist UK investments and also offshore assets in one consolidated portfolio. Assets can be viewed and valued in all the main currencies and both current date and backdated valuations are available.
Therefore, as well as being able to make the Alternative Investments via Platform One, clients and advisers are also able to view valuations which include their EIS and Seed EIS investments, BPR shares and Income Bond ISA holdings.
Platform One can also either hold Seed EIS, EIS and BPR shares securely in the Platform One nominee or record the alternative investments so that they can be shown within the client portfolios.
Enterprise Investment Scheme
EIS offers private individuals the opportunity to invest and support small companies and to gain tax reliefs on their investment.
Investment in EIS companies is typically higher risk as they are small unquoted trading companies. The tax reliefs available provide incentives to support such companies.
Subject to qualifying rules, investors can receive Income Tax relief on the initial investment at 30%, plus Capital Gains Tax deferral, and tax free gains or loss relief depending on the outcome of their investment.
Seed EIS is aimed at helping new and early stage companies to raise capital from private investors.
The tax reliefs for private investors therefore recognises the particular risks that investments in such early stage companies present. They also provide assistance to small companies who normally face problems obtaining early stage funding.
Subject to qualifying rules investors may receive Income Tax relief at 50%, Capital Gains Tax and Share loss relief.
Business Property Relief (BPR)
Business Property Relief (BPR) provides tax relief on qualifying assets that are held by private investors for a minimum period of 2 years.
These are usually private trading companies that provide a relatively low level of risk and are managed by a specialist firm that manages these types of investments.
In addition to the managed private companies, BPR relief is also available on AIM Market investments and Platform One offers a choice of AIM ISA and AIM Portfolio investments.