Key benefits for Angels
HoxTech Angels is the Angel investor network for Dreamstake Capital (“Dreamstake”). HoxTech Angels aims to give investors access to the very best early stage tech start-ups in Europe, and Dreamstake acts as a strategic advisor to the companies preparing them for funding, including review of business plan.
The selected companies present to our investors in London, who come together once a month and are passionate about technology. We provide access to a broad range of investment opportunities through our Dreamstake platform, allowing investors to build a portfolio of investments and diversify risk, which is particularly important for investments in early stage technology companies.
Becoming an Angel
HoxTech Angels need to qualify as self-certified High Net Worth Individuals or Sophisticated Investors. Please see more information here [x].
Whilst angel investing carries risk, investments in tech start-ups can bring attractive returns. Investing in private, unquoted companies is a key asset class and should considered as part of a balanced portfolio. HoxTech Angels will make their own decisions about which start-ups to invest in, and will have the opportunity not only to provide capital but also their own experience and knowledge, helping the companies grow and contribute to return on investment.
HoxTech Angels does not engage in the deal process, does not hold cash on behalf of its investors , does not require a power of attorney to be signed or provide investment advice.
In recognition of the importance of early stage angel investing, the UK Government has introduced attractive tax relief schemes to encourage more investments in small businesses and offset some of the risks. It should, however, be noted that angel investing does carry elevated risks as well as rewards, and as with all financial investments you should take professional advice.
Tax Enterprise Investment Scheme Reliefs (EIS)
Income tax relief of 30 percent. You get £3,000 off your income tax bill for investing £10,000 under EIS. No capital gains tax on any profits after 3 years. If you make a loss on your investment, you can offset that loss against income tax. If you lose your entire £10,000 investment, your actual loss is only £7,000 (£10,000-£3,000). You can reduce your taxable income for the year in which you disposed of the shares by £7,000, resulting in a saving of £2,800 (40 per cent of £7,000) for a higher-rate taxpayer. You could also offset your loss against other capital gains. No inheritance tax to pay on shares bought through EIS. You can invest a maximum of £1 million each year through EIS. [Source]
Seed Enterprise Investment Scheme (SEIS)
SEIS is similar to EIS but designed for investing in smaller companies, and providing more generous tax breaks. Businesses must be less than two years old (there are no age restrictions under EIS. Tax relief of 50 percent. You get £5,000 off your income tax bill for investing £10,000 under SEIS. No capital gains tax to pay on profits (same as EIS). No inheritance tax (same as EIS). [Source]
Loss relief is similar to EIS. It is extra relief called capital gains reinvestment relief. If you have paid capital gain tax on other investments, you can claim up to 50 percent of the tax paid if you re-invest that money into SEIS.
In summary for the 2014/15 tax year, the downside protection is 86.5 per cent under SEIS – so you’ll get back £8,650 from a £10,000 investment that fails completely if you pay
enough tax to use all the reliefs. The maximum you can invest is through SEIS in any tax year is £100,000.
HoxTech Angels will offer its members complimentary tax seminars on both EIS & SEIS tax breaks. However, all investors should take their own tax advice before making any investment.