Byron club seeks to raise £1.5m to launch new London club opening planned for 2016

Byron Club seeks to raise £1,500,000.00 in order to refurbish the club
The funds can be invested as an EIS (Enterprise Investment Scheme)

The reasons why it is better to structure it,  as an EIS is as follows:

1.    The investors would get tax relief on the way in – of 30% on their income tax – so assuming they have income tax - that would be a substantial saving (and could be higher if we structure it partly as a Seed EIS – up to 50% income tax saving).  The investors would receive their tax rebate circa 6 months after the investment and the cheque would come directly from HMRC.  The new health club company still receives the full £150,000 from each investor.

2.    The investors would also get capital gains tax deferral – so if they had any capital gains they could defer the tax for the period of time they have invested in the health club.  This in effect is a form of cash flow saving for the investors.

3.    Very importantly – the investors would not be taxed on the investment once they sell – so for example – if they put £150,000 in and in four years time they sell for £225,000 – there is no capital gains tax on the gain of £75,000.

4.    The investors investment of £150,000 would be 100% free from Inheritance Tax after 2 years.  This is a tax many people don’t like to think about – but is very important to plan for and is one of the great benefits of structuring it as an EIS.

5.    I should point out that in order to obtain the above EIS tax advantages, the investors must stay in for at least three years.  This may be an advantage to the new health club – as it means you know that you most likely have all the investors in for at least three years.