You should not invest in this product unless you have thought carefully about whether you can afford it, and whether it is right for you.
The performance of the Seneca EIS Portfolio Service is dependent on the Portfolio Manager’s ability to identify appropriate Qualifying Companies. In addition, the investment timetable may not always be achieved, which can delay the availability of the tax advantages or, in some cases, result in the loss of the tax advantages altogether. In some circumstances, a delay could cause certain Investors to lose the opportunity to defer capital gains which occurred more than three years ago.
Risk to Capital
Prospective Investors should be aware that the value of shares in each Investee Company can fluctuate. In addition, there is no guarantee that the valuation of shares will fully reflect the underlying net asset value of the Investee Companies. Your capital and the investment return are not guaranteed and you may not receive back all or any of the money you invest. You should consider the Seneca EIS Portfolio Service to be a three to five year investment. Investments will be made in AIM stocks and unquoted companies. Investments in unquoted companies present a higher degree of liquidity risk relative to investments quoted on the London Stock Exchange. You should not invest in this product unless you have thought carefully about whether you can afford it, and whether it is right for you.
Investments in unquoted companies are less liquid than those traded on the main stock exchanges. It is not intended that any income or capital will be returned to Investors during the three year period. After holding the shares in the Investee Companies for the initial three year period, it may still be difficult to realise the shares or obtain reliable information about their value. Consequently whilst we will always attempt to redeem your investment upon receipt of a withdrawal request, this may not always be possible. You should be prepared to leave your investment intact for the medium term, and at least for the minimum three year period.
Rates of tax, tax benefits and allowances described on this site are based on current legislation and HMRC practice and depend on personal circumstances. These may change from time to time and are not guaranteed. Seneca Partners does not provide advice and potential Investors are recommended to seek specialist independent tax and financial advice before investing. The Seneca EIS Portfolio Service has been designed with UK resident taxpayers in mind. If you are not resident or ordinarily resident in the UK for tax purposes, it is not appropriate or advantageous for you to invest in the Seneca EIS Portfolio Service.
We will invest in companies which we reasonably believe to be Qualifying Companies at the time of investment, but please be aware that there is no guarantee that such companies will remain Qualifying Companies at all times thereafter, or that EIS tax reliefs will be available to Investors. There are circumstances in which an Investor could cease to qualify for the taxation advantages offered by the EIS. If a Qualifying Company ceases to carry on a Qualifying Trade during the three year period, this could prejudice its qualifying status under the EIS. In addition, if a Qualifying Company does not employ the funds made available to it within the deadlines set out in the EIS rules, it would be in breach of those rules and the tax advantages would be withdrawn. The situation will be closely monitored with a view to preserving each Qualifying Company’s EIS status, but this cannot be guaranteed.
A failure of a Qualifying Company to meet the qualifying requirements for the EIS could result in:
- Investors being required to repay the 30% Income Tax relief received on subscription plus interest on the same;
- a liability to CGT on a disposal of shares; and
- any deferred gain crystallising.
In certain circumstances, the Portfolio Manager may decide to dispose of a holding in an investee company that has been held for less than 3 years, where it is believed to be in line with the Investment Objective of maximising Investor returns.
If the Portfolio Manager disposes of part or all of the shares held on behalf of an Investor in an investee company that have been held for less than 3 years, the tax reliefs and tax benefits of EIS investment will be lost in relation to the shares sold. This may impact on an Investors own tax position and therefore the impact of this risk should be carefully considered by an Investor prior to investing in the Service.