Читать книгу How To Become A Business Angel - Richard Hargreaves - Страница 51

Alongside the decision to diversify your risks, you need to give thought to how much you are prepared to invest in your portfolio. As part of this thinking you should consider the difference between the amount you invest and the net cost of that investment after tax reliefs, as it may well influence the decision on the amount you invest.

For example, you might decide you are prepared to invest a total of £250,000 before tax reliefs. That will cost you £175,000 after upfront EIS income tax relief of 30%.

However, if you had paid capital gains tax at 28% in the preceding three years or are expecting to do so in the next 12 months, you can claim capital gains tax rollover relief as well. That might reduce the upfront net cost of the investments by a further 28%, or from 70% to 42% of the amount invested.

So were you to decide to make approximately ten investments with your £250,000 that would imply a unit investment size of £25,000 at a net cost of £17,500 per investment without rollover relief and £10,500 with it.

However, you also need to plan for further investment rounds. There are lots of good reasons you might invest more in your developing portfolio and sometimes you have little choice unless you are prepared to accept a complete write-off. If your total risk amount before tax reliefs is £250,000 you might put aside from £50,000 to £100,000 to invest in further rounds. This could reduce your typical initial investment unit to £15,000.

If, on the other hand, you decided to risk £250,000 net of upfront tax reliefs and you can claim rollover relief the unit size could rise to over £35,000 (£15,000 divided by 42%) on the same analysis.