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HMRC internal manual

Inheritance Tax Manual

Stocks and shares: BES/EIS/VCT/EZ/Property Enterprise Trust: introduction

Several measures have been introduced to attract venture or development capital to deprived areas and businesses which would not otherwise benefit by providing tax breaks for investment in unlisted companies. These include

  • Business Expansion Scheme (BES),
  • Enterprise Investment Scheme (EIS), and
  • Venture Capital Trusts (VCT).

EIS replaced BES from 1 January 1994.

Another vehicle to attract investment to deprived areas is the

  • Enterprise Zone (EZ). 

Though not involving unlisted companies, the usual form of investment for individuals under the Enterprise Zone scheme is in units in Property Enterprise Trusts. Often, the investments are made in more than one company and the investment vehicle is an arrangement called a Managed Fund or Scheme. Here, managers raise funds from a number of investors and invest the total in companies chosen by the managers. The shares acquired are then either allotted to the investors direct or held, often by nominees, on their behalf.