Taxation Risk
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Written by Yielders
Updated over a week ago

The tax treatment and regulatory environment for the SPVs in general may change from time to time depending on governmental and regulatory priorities and circumstances. There is no guarantee that the expected (S)EIS reliefs will always be available in the form expected. It is possible that some or all of the expected reliefs are withdrawn by the government, potentially retrospectively. In particular, the government and HM Revenue & Customs have been taking steps recently to tighten the regulations in relation to (S)EIS investments which seek to provide capital protection and to remove (S)EIS benefits from some such investments. No SPV in the portfolio is permitted to or does offer capital protection.

There are circumstances in which an Investor could cease to qualify for the taxation advantages offered by the (S)EIS. For example (and without prejudice to the generality) Capital Gains Deferral relief could be lost if an Investor ceases to be resident or ordinarily resident in the United Kingdom during the three year minimum holding period. In addition, an Investor could cease to qualify for (S)EIS income tax relief if he receives value from one of the investee companies during the period beginning one year before the shares in the investee companies are issued and ending on the conclusion of the three year minimum holding period. Payment of a dividend, however, would not typically be regarded as a receipt of value.

If any of the SPVs cease to carry on business of the type prescribed for (S)EIS Qualifying Companies during the three year period, this could prejudice their qualifying status under the (S)EIS. If Yielders does not comply with the rules in relation to utilisation of the invested funds with the applicable time limits then this again could prejudice its qualifying status under (S)EIS.

The consequences of any of the SPVs ceasing to qualify for EIS purposes could include withdrawal of any tax reliefs already received by an Investor (including repayment for example of any income tax relief to HMRC) and the loss of any future (S)EIS reliefs.

Yielders via its Website and any other communication platform offers no guarantees or assurances as to any income, capital growth or other financial gain through your investment in a SPV.

Property prices can go down as well as up and you can lose all capital invested.

Subject to the terms of the shareholders’ agreement and articles of association, you may sell your shares in any SPV provided it is done through Yielders. In respect of such sale, Yielders will charge you a fee of £50. We do not offer any assurance or guarantee that your shares will be sold and such sale will be subject to you or Yielders finding a willing buyer for the shares at the relevant price. We do not underwrite or guarantee the price or liquidity of any onward sale of shares, however, we confirm that we will use all reasonable endeavours to sell the shares on your behalf.

We will provide you with the SPV’s company documentation. We strongly advise you carry out your own independent due diligence on the investment being offered via Yielders, including (but not limited to) this information memorandum and SPV company documents in order to ascertain the risks involved.

If you are not familiar with the transaction documentation, you must seek professional advice before proceeding to invest.

Property prices can vary from property to property as well as location. These factors can in turn influence property process and can make them more or less susceptible to negative growth.

By investing in a property through the Website, you acknowledge that you may not get all your money back if the property price does fall. As such, you acknowledge that by virtue of these terms, terms on the Website and the terms featured in the transaction documents provided to you, we are warning you that you should not invest any more money that you are able to afford to lose without altering your standard of living.

Any investment you make will be illiquid as further sale of shares is not guaranteed. It will therefore ultimately be dependent on the sale of the asset at the end of the term of your investment. Investment in this portfolio should not be regarded as short-term in nature. There can be no guarantee that any appreciation in the value of the shares will occur or that the commercial objectives of the SPV will be achieved.

If a property owned by the SPV you hold shares in receives rent, this (subject to all costs of the SPV being met) will be paid to you and the other shareholders of the SPV in the form of dividends, i.e. net of any fees, costs and expenses payable. In the event that the property does not produce rent or the amount of rent received is less than the amount of fees, expenses and costs payable, no dividends will be paid. As such, there is a risk that you will not see a return on your investment. Past performance should not be used as a reliability indicator as future potential is unknown and is independent of past performance.

Information provided about the asset and SPV as well as projections of future performance are based on the internal calculations and opinions of Yielders based on information provided to us. They are subject to change at any time and influenced by third party factors outside of our control. Forecasts are not reliable indicators of future results and should not be relied upon.

An investment in shares may be subject to dilution in the future. Dilution occurs when a company issues more shares. Dilution affects every shareholder of that company that chooses not to purchase the new shares being offered. As a result, an existing shareholders’ proportionate shareholding can be reduced or ‘diluted’. This could impact voting, dividends and value of their shares.

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