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Bure Valley Group is an investment introducer platform which links successful investors with exciting, innovative UK startups seeking funding. This content is for information purposes only and should not be taken as financial or investment advice. 

As an investor, you cannot control your investment performance (although you can build a strategy which maximises your chances of doing well). However, there is one area where you have much more control – costs. Rising competition amongst fund providers has helped drive down fees in recent years. This race to the bottom has helped many investors achieve greater “real returns” by cutting out unnecessary fees. 

Investor costs also take another form – taxes. Here, the UK investor often has a unique advantage in mitigating needless erosion by the state. Below, we provide an overview of the best tax-efficient options available to early-stage investors.

To learn more about our EIS projects and other early-stage opportunities, visit our portfolio page. For enquiries regarding our latest projects and funding, you can reach us via:

+44 160 334 0827

[email protected]


Innovative Finance ISA

ISAs are a powerful way for investors to grow tax-free wealth. An individual can contribute up to £20,000 per year to their ISA(s) and earn capital gains, dividends and interest inside – without their respective taxes. 

The Innovative Finance ISA is focused more on the early-stage space, allowing investors to engage in peer-to-peer (P2P) lending and crowdfunding. Outside of an ISA, investing in P2P loans generates interest which would form part of your Personal Savings Allowance.

The Financial Services Compensation Scheme (FSCS) guarantees up to £85,000 if your Innovative ISA provider collapses. However, it does not guarantee the P2P loans inside. You need to weigh the risk that your debtors may not repay, in full, the money you lend to them.


Seed Enterprise Investment Scheme

This scheme – called SEIS in shorthand – is designed specifically to encourage investment into the UK’s startup and early-stage companies by offering generous tax benefits. 

For instance, in 2023-24 an investor can commit up to £200,000 towards SEIS companies each tax year and receive 50% initial tax relief. Capital gains tax (CGT) is exempted on any SEIS shares held for at least three years.

Like most early-stage investments, the companies available under SEIS are a higher risk to investors compared to more established, profitable firms with a proven business model. However, the growth potential can be far higher and “loss relief” is available to investors if their SEIS shares are disposed of at a lower value than the original purchase price.


Enterprise Investment Scheme

This scheme – EIS – is similar in many ways to SEIS, except it targets larger companies which have progressed further into their business cycle. For instance, to qualify for EIS a business must meet criteria – e.g. up to 250 full-time employees and less than 7 years of trading history.

Investors have more scope compared to SEIS, however, with an individual allowed to invest up to £1 million into EIS-qualifying companies each tax year (or, up to £2 million if these are classed as “knowledge-intensive”). 

EIS can also be a powerful tool for estate planning. EIS shares which have been held for at least 2 years are exempt from inheritance tax (IHT). 


Venture Capital Trust

An investor can invest up to £200,000 into VCTs each tax year. By doing so, they can access 30% income tax relief as well as tax-free income from any dividends generated. 

VCTs target small expanding companies which are unquoted (not listed on traditional stock exchanges – although the VCT itself will be listed on the LSE). They can be a useful diversifying tool for investors looking to take full advantage of tax-efficient schemes in the startup space.

Bear in mind that VCTs do not offer IHT relief like EIS and SEIS. There is also no CGT relief or deferral. Loss relief is not a feature, either.



In some countries, pension funds have more freedom than UK-based providers regarding the freedom to invest in startups (on behalf of their members). 

In Canada, for instance, pension funds have placed significant sums towards private equity – with the Canada Pension Plan Investment Board (CPPIB) investing at least Rs 21,440.5 crore in multiple Indian ventures in late 2023.

There are signs that the UK might start to follow in this direction. Last year, Chancellor Hunt announced plans to help retirees boost their pension savings by allowing large pension providers to invest at least 5% of their funds into private equity. 

So far, the plans have received a lot of backlash and criticism. However, they could open up another route for investors to build a tax-efficient portfolio in private equity. For instance, funds within a pension pot are free from IHT. 

Capital gains and dividends within pensions are tax-free. Contributions receive tax relief equivalent to the taxpayer’s highest marginal rate (e.g. 45% for an Additional Rate taxpayer) – up to their annual allowance. Moreover, an employee can also benefit by receiving “free” contributions” from their employer via the auto enrolment rules.



Interested in finding out more about the exciting startup projects we have on offer to investors here at Bure Valley Group? 

Get in touch today to start a conversation with our team and discuss some of the great investment memorandums we have available here:

+44 160 334 0827

 [email protected]


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