Ingenious infrastructure EIS - any opinions?

thestens

we have been recommended to invest in this as part of a mixed portfolio of investments by a St James Place advisor. We are doubtful due to the risk and the high fees. We aren't higher rate tax payers so are unsure about the amount we could reclaim. Any opinions?

bowlhead99

The income tax relief you can claim on the initial purchase is not limited by your marginal rate of tax- it's a flat rate 30% for everyone - so it's just limited to the total amount of income tax you would have had to pay if you hadn't invested in the EIS.

Then if you actually take a loss on the net cost of your investment after relief, you can claim that loss against your income tax bill at your marginal rate (or even carry it back to the tax year earlier if that's better) or carry it forward against later capital gains

EIS can also be useful by allowing you to defer capital gains from other asset sales. So there's a range of good tax stuff on offer.

The tax breaks can be decent compensation for the risks you take but the key is to ensure you diversify so you're not having your eggs in one basket. Long term averaged returns with useful tax relief is a good thing. A large loss or gain because you only did one or two EIS deals will be nowhere near the sector returns you might have hoped for.

It may not be a bad thing to do at all if it's part of a mixed portfolio and the portfolio is relatively large and you have a decent capacity for losses here or there. Re- fees: high expense goes with the territory as individually sourced and negotiated deals in startup or early stage energy or media businesses is about as far away from a cheap passive tracker as you can get. But make sure SJP isn't taking a much bigger cut than if you went direct or through another intermediary.

As for the Ingenious products specifically, I'm not familiar with them. Ask the advisor why they are better than other EIS management teams.

kidmugsy

If ever I use a financial advisor it will be an IFA, not a salesman from a financial firm. "We aren't higher rate tax payers so are unsure about the amount we could reclaim": I'm not too impressed by an advisor who leaves you ignorant on that point.

I've looked into EISs and don't fancy them for us. We don't have enough income, or capital, or capital gains, or capacity to absorb illiquidity and inflexibility.

bigadaj

OP - st James place have a poor reputation for very high fees, have you spoken to any local independent financial advisors, they will almost certainly be cheaper and should be able to offer investments from the whole of market rather than restricted as for sjp.

dunstonh

we have been recommended to invest in this as part of a mixed portfolio of investments by a St James Place advisor.

St James place are tied to the investments and services of St James Place. They are not allowed to retail products from the whole of market. So, straight away, I would be on guard if buying a high risk product (which this is) from an FA who may not have the scope of permissions to offer it.

This product is high risk and specialist. So for you not to be in the position where you even know if it is going to be of benefit to you is disgraceful.

So, we have an FA, who could be selling outside of his permissions, a product that is high risk and specialist and appears to provided no explanation of benefits that you understand. I suggest you give SJP a call directly and ask them if they retail that product. if they say no, then you should make a complaint.

DrSyn

You are not a higher taxpayer. You are unsure about the suggested investment. You have so much money that you can even consider going into an EIS. I think you can afford to pay for a second opinion from an IFA. Take a look at the site below to start with:-

https://www.citizensadvice.org.uk/debt-and-money/savings/getting-financial-advice/

Maybe even consult a tax expert.

Remember if any advisor cannot explain an investment to you in a simple way, just walk away!

High fees can make even the most tax efficient investment, a very poor investment!

Aegis

dunstonh wrote: »

St James place are tied to the investments and services of St James Place. They are not allowed to retail products from the whole of market. So, straight away, I would be on guard if buying a high risk product (which this is) from an FA who may not have the scope of permissions to offer it.

This product is high risk and specialist. So for you not to be in the position where you even know if it is going to be of benefit to you is disgraceful.

So, we have an FA, who could be selling outside of his permissions, a product that is high risk and specialist and appears to provided no explanation of benefits that you understand. I suggest you give SJP a call directly and ask them if they retail that product. if they say no, then you should make a complaint.

As it happens I know the external research agency which looks into these products for SJP, so I know they maintain a panel and are able to sell them. I don't know their criteria for inclusion on the panel and I don't know SJP's charges for selling them, but I do know that they at least have a researched panel for such investments.

I tend to find that there's more variety in the EIS space between January and April each year though.

thestens

Thank yo all for your opinions. To be fair to the St JP advisor, he did explain why he thought it was a good idea for us and left printed stuff but I'm pretty dim on all this. We are going to consult an IFA locally for more advice, but think we'll pass on this particular product! Think we'll probably not use St JP either.