Tax-Efficient SEIS and EIS Funds Enabling Investors to Access Innovative Technology Start-Ups
Since 1983, Oxford Technology has specialised in investing in startup and early stage technology companies based in and around Oxford. Our latest funds take advantage of SEIS and EIS tax reliefs. Detailed information about performance can be found in our Latest Quarterly Report
Our Funds
Oxford Technology manages two funds: our flagship three-year combined SEIS and EIS fund, and a one-year EIS fund. Subscriptions into both funds will be used to acquire new shares in the next investments that Oxford Technology makes, but they have slightly different risk/return profiles.
Through them we typically invest up to £150k of seed funding into SEIS companies, and up to £300k of EIS follow-on funding, whilst taking advantage of the generous tax reliefs and downside protection on offer from the schemes. If you have any questions, please contact us.
SEIS and EIS Start-Up Fund
Our flagship fund invests your subscription over three tax years into a portfolio of ~8 tech startups. In Year 1, we invest a third of your subscription into SEIS companies. In Years 2 and 3, we provide follow-on EIS funding to high-performers. The ability to make follow-on investments is very important. Experience shows that investors who can do so have the best returns, but by investing from day one they can also achieve the highest exit multiples.
EIS Development Fund
Your capital is invested over a single tax year into ~6 select EIS companies which are already in the Oxford Technology portfolio. Companies will have progressed since our SEIS fund and command higher valuations, so the EIS Development Fund offers a slightly lower risk/return potential than the SEIS Start-Up Fund. However, it can make for easier tax planning whilst still providing plenty of scope for significant capital growth.
Question: Why our SEIS funds and EIS Funds?
Answer: Capital Growth AND Tax Reliefs
SEIS Tax Reliefs Summary
- Income Tax bill reduced by 50% of investment
- Income Tax bill reduced further if the business fails - up to 22.5%
- 50% relief against capital gains which is not merely deferred but cancelled
- No tax on Capital Gains from investments
- No inheritance tax on shares after 2 years
- Tax reliefs can be claimed as if the investment had been made in the previous financial year, if the investor wishes
Tax treatment depends on the individual circumstances of each client and may be subject to change in future.
EIS Tax Reliefs Summary
- Income Tax bill reduced by 30% of investment
- Income Tax bill reduced further if the business fails - up to 31.5%
- The payment of tax on a capital gain can be deferred where the gain is invested in EIS shares. The Capital Gain to be deferred can be made three years before, or one year after the investment
- No tax on Capital Gains from investments
- No inheritance tax on shares after 2 years
- Tax reliefs can be claimed as if the investment had been made in the previous financial year, if the investor wishes.
Tax treatment depends on the individual circumstances of each client and may be subject to change in future.
Transparent Performance:
Our SEIS and EIS Portfolio
OT(S)EIS Portfolio Value Distribution Per Tax Year
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The above figure refers to the past and the past performance is not a reliable indicator of future results.
The graph above shows the returns which have been made so far by those who invested in OT(S)EIS in each of the tax years over the last ten years. So, for example, those who invested £100,000 (to make the sums simple, although some investors did invest this amount) in the 2014/15 tax year have so far been able to claim about £36,000 in income tax reliefs and received back about £85,500 in cash from exits (all tax-free). In addition they have about another £60,500 in cash, held in escrow, and likely to be received in autumn this year. In addition, they have another £158,000 which is what we regard as the ‘fair value’ of the exit milestones from one investment. The fair value of the remaining investments, which have not yet exited is a further £270,500. So the total return, adding all these together is £610,500, a multiple of just over 6x of the initial amount invested. And in addition to this, there is the potential to receive up to a further £2m if all the milestones from one of the exits are met. All these returns will be tax-free.
We believe that an investment in OT(S)EIS has been one of the best investments that it has been possible to make in the UK over the last ten years. We believe the reasons are clear. It is not luck. We are all scientists. We focus on the science. We receive a large deal flow and pick carefully (about 5/1,000 each year) and we get actively involved with the founders, especially in the early years to help establish the business model and pricing. We thought that it would work and so far it has. So please consider making an investment in OT(S)EIS. Min £15k.
Investor Presentations:
Co-Investment Opportunities
Oxford Technology offers investors the opportunity to make direct follow-on investments into one or more of our portfolio companies raising additional capital. If you would like an invite to future events please subscribe.
On Thursday, 7 December, Scintam and Cytecom made presentations seeking additional EIS funding.
