You might have heard that a new investment opportunity has recently opened with us.   Here we aim to answer some of your questions about Crowdcube, investing and tax relief.   You can find out all the details of the investment opportunity and how to invest by clicking the button below:

 

​

​

​

​

​

​

What is Crowdcube?

​

Crowdcube is a platform that allows businesses to raise investment by selling equity (equity crowdfunding). Investing in a company via Crowdcube means that you become a shareholder. The percentage of the company you own is then calculated from the amount you invested and the total amount of shares/equity issued by the company.

 

Following the processing of your investment, you’ll be issued a Share Certificate proving your ownership and outlining your rights. When there is an exit, such as an acquisition or management buyout, you will have the opportunity to cash in your shares at the exit valuation.

 

​

What is the EIS: Enterprise Investment Scheme?

​

Investing in ASAP Watercrafts provides UK taxpayers with some rather nice tax breaks. The Enterprise Investment Scheme (EIS) has been set up by the UK government in order to encourage investment in new businesses.

​

ASAP Watercrafts has applied for and been awarded our EIS assurance from HMRC, which means every UK taxpayer who invests in this round will benefit from EIS tax relief.

​

While we have made every effort to explain EIS below, we do recommend that you seek independent tax advice before completing your investment. They will be able to explain how EIS will affect you personally and can help you plan an investment strategy.

Please also be aware: Investments of this nature carry risks to your capital. Please Invest Aware.

 

​

EIS Explained

​

UK taxpayers can invest up to £1 million in any given tax year in an EIS-eligible company to receive 30% tax relief. This relief can also be ‘carried back’ to the previous tax year, meaning there is ample opportunity to make use of your allowance.

​

The one caveat is: you are locked into the scheme for at least three years. As such, EIS should be seen as part of a long-term investment strategy. 

Tax relief is available on...

​

1. Income Tax

Every EIS-eligible investment (up to £1m per year) provides income tax relief of 30% of the invested amount. So, the maximum relief in one year would be £300,000. Of course, you need a sufficient tax liability in order for the relief to count (i.e. you cannot use the relief as ‘credit’ on your account with HMRC).

​

The shares must then be held for a minimum of three years from the date issued otherwise the tax relief will be withdrawn. This is to help avoid abuse of the scheme and encourage investment in companies you actually believe in.

​

NOTE: Allocations are on an individual basis, so a couple could invest up to £2m in a tax year and still benefit from the full income tax relief on offer.

​

2. Capital Gains Tax (CGT)

As long as you’ve held the shares for at least three years and claimed your income tax relief on them, you will also be exempt from paying any Capital Gains Tax (CGT) on any profit from the shares. You can, of course, hold the shares for far longer, potentially increasing your capital gains by many multiples.

​

3. Losses

EIS investors are also protected against loss of share value. If the shares are disposed of at a loss, you can opt to offset the loss value against the current or previous year’s income, rather than capital gains. The value of the loss does not include any Income Tax relief already provided.

​

4. Capital Gains Tax deferral

If you invest your capital gains from EIS shares in another EIS eligible company, you can defer payment of your Capital Gains Tax. The new investment must be made between a year before to three years after the gain arose. The companies invested in do not have to be connected in any way. 

​

Carry Back

The EIS also allows part or all of the share cost to be “carried back” to provide relief for Income Tax or CGT from the preceding tax year, as if those shares had been purchased in the previous year. There is, however, a cap on EIS tax relief in any given year. For more information, please see the HMRC website.

​

PLEASE NOTE: The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.

 

​

EIS Investment Example

It can be difficult to see what all this tax relief looks like in practice. So, to help clarify, we’ve created a few example scenarios to show you what your investment could offer in terms of tax relief. To help simplify the maths, we’ll assume that you invest £10000 in Asap Water crafts and that you’re in the 45% tax bracket.

 

Case 1: The company does well and doubles its value and you hold the shares for three years

Investment = £10000

Income Tax relief @ 30% = £3000 (deducted from your income tax bill)

Share sales = £20000

Capital Gains Tax = £0

30% discount on Wave Jam electric jet board = worth £1994.76

Jet boarders club, use of a demo board, Wave Jam dry bag & sticker = priceless

Your gain = £13000 (£10000 profit from the sale plus £3000 income tax relief) + £1994.76 in discounts = £14994.76

 

Case 2: The company value stays the same

Investment = £10000

Income Tax relief @ 30% = £3,000 (deducted from your income tax bill)

Share sales = £10000

30% discount on Wave Jam electric jet board = worth £1994.76

Jet boarders club, use of a demo board, Wave Jam dry bag & sticker = priceless

Your gain = £3600 (from income tax relief) + £1994.76 in discounts = £5594.76

 

Case 3: The company closes and your shares are worth nothing

Investment = £10000

Income Tax relief @ 30% = £3,000 (deducted from your income tax bill)

At risk capital = £7000

Loss relief on at risk capital @ 45% = £3150

30% discount on Wave Jam electric jet board = worth £1994.76

Jet boarders club, use of a demo board, Wave Jam dry bag & sticker = priceless

Your actual loss = £3850 (£10000 initial investment minus £3000 in Income Tax relief and £3150 Loss relief) - £1994.76 = £1855.24

​

​

​

​

​

​

 

Try applying this to the amount you are interested in investing, we hope you'll be pleased with the possible gains!  If you are still unsure of anything feel free to send us a message

​

Thanks for your incredible support!

​

​

​

​