Raise a glass to EIS relief!

It was recently reported that sales of English wines could hit £100 million by the end of 2015 (Source: EWP).

With the upward trajectory forecast to continue for some time to come there is likely to be a significant amount of investment going into UK wine businesses over the next few years.

Investors may have reason for further cheer in that, contrary to popular belief, a wine-making business can qualify for EIS relief.  We recently dealt with a case where EIS had previously been ruled out on the basis that the company’s activities were presumed to fall within the excluded category of “farming and market gardening”. We successfully applied to HMRC for advance assurance, upon which it was confirmed that the activities of the company – which extended to processing and bottling the wine, and marketing the finished product for sale – would not fall within this definition, such that the company would qualify for EIS.

It is not just English vineyards which could benefit from this relief.  Regular Tax Biters will recall from another recent article that an overseas trade can qualify for EIS, provided the company issuing the shares has a UK permanent establishment (which could be limited to operating in a UK company).  Investing in a vineyard has become more commonplace in recent years, so it is worth considering whether a valid claim for EIS relief can be made (when a group of friends get together in a wine consortium tax considerations often go out of the window!).

This is just one example of many where, upon review, we have been able to get HMRC to grant EIS clearances for companies who had previously thought they wouldn’t meet the trading requirements.  Please get in touch for further information and details of how we can assist.

 

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