5 reasons why EIS deployment timescales are so important

1. If an investor is seeking carry-back relief on their investment, they may have a much shorter window of opportunity to get their cash deployed before they lose their eligibility. For example, if an investor is seeking to offset income tax relating to the 2022/2023 tax year, they must have funds deployed before the end of the 2023/2024 tax year. With tax returns due by 31st January, there is still time for clients to minimise their tax bill by investing in Deepbridge’s two EIS funds and claiming carry-back for the 2022/23 tax year.
2. EIS tax benefits are only available once deployment into an EIS eligible company is made, not when the cash is given to the provider. This means that the quicker a deployment is made, the quicker it allows investors to start the process of claiming their potential tax reliefs. With many other EIS funds taking up to 12 months to deploy investors' capital, by investing with Deepbridge investors can get a head start on potential capital growth over other EIS funds.
3. For each investee company, an investor will receive an EIS3 certificate. Once they have this, they may then claim their potential tax reliefs. Ordinarily, EIS3s will be provided approximately 12-15 weeks after funds are deployed, but can take longer. On average, according to Deepbridge’s MICAP review, our 3-month turnaround of EIS3’s puts us at the top end of the market.
4. With inflation recently reaching a 41-year high*, if your client invests in an EIS that takes 12 months to deploy, it’s highly likely they won’t be earning any interest in the meantime and, therefore, their initial investment capital will have decreased in value by the time deployment has taken place. At Deepbridge, we put investors’ capital to work in the quickest time possible.
5. By deploying capital on a monthly basis, it allows investee companies to utilise these funds to realise their growth ambitions and provide potential returns for investors quicker. With many of Deepbridge’s investee companies looking to solve real-world issues within the tech and life sciences sectors, this is an opportunity to support the UK economy as a world leader in innovation.