I've put a bit of money into EIS in the UK and wondered what the board thought about these investments.
They are start up companies but the government gives 30% tax relief on the investment (against higher rate tax rate of 40%), no tax on gains or dividends, and tax relief on 60% of the invested amount (initial amount minus tax relief) if the company goes bust (which a fair amount will).
So they are very high risk investments but the tax reliefs take a lot of the risk into account.
So far I have invested in a couple of companies but higher amounts than sensible as they are companies that I have used and think are very good at what they do but want to spread smaller amounts around.
Obviously should be just a small amount of the portfolio
