EIS Investments in JustPark and Grind Coffee

Lucy_P

Hi, I wonder if anyone might be able to help me work out what to do.   I invested some money via Crowdcube on a couple of EIS qualifying investments a few years back.  I needed to have these invested for 3 years to claim the tax relief. Both of these companies are still going and I think Grind certainly seems to have done well.  I could do with seeing if my investments are worth anything with a view to cashing them in as I could do with the money right now however I have no idea how to go about this.  I contacted my accountant who said I should write to them but I have no contact details to write to the companies as the only acknowegment I got was from HMRC.  Does anyone have any idea where I can start to work this out please?  Many thanks in advance. 

Prism

Generally you wait until the company is bought by a larger company or floats on a public exchange (IPO). However there may be some scope to sell the shares early here

Express interest to buy and sell shares in private European businesses | Crowdcube

wmb194

Lucy_P said:

Hi, I wonder if anyone might be able to help me work out what to do.   I invested some money via Crowdcube on a couple of EIS qualifying investments a few years back.  I needed to have these invested for 3 years to claim the tax relief. Both of these companies are still going and I think Grind certainly seems to have done well.  I could do with seeing if my investments are worth anything with a view to cashing them in as I could do with the money right now however I have no idea how to go about this.  I contacted my accountant who said I should write to them but I have no contact details to write to the companies as the only acknowegment I got was from HMRC.  Does anyone have any idea where I can start to work this out please?  Many thanks in advance. 

This is the problem with investing in early stage, unlisted companies. Have a look at the help pages linked below. You could also try via Crowdcube's marketplace, Cubex.

https://help.crowdcube.com/hc/en-us/articles/4418454736786-Can-I-sell-my-shares-

https://help.crowdcube.com/hc/en-us/articles/206232364-Can-I-transfer-my-shares-

JustPark appears to be on Cubex but I don't see Grind Coffee.

https://www.crowdcube.com/cubex/justpark

Prism

Grind | Crowdcube

Lucy_P

Thanks for the replies. I think I understand this now, clearly I did not when I invested! I thought that at maturity of the EIS scheme you could get the value of the shares back easily but by the sounds of what I am being told here it is better to wait to see if the companies eventually sell to a larger company and then floats it's shares and at that point they are easier to sell (not necessarily higher value but at least easier). Ok I think I am prepared to wait and see what happens but I might see what it is possible to sell them for now anyway if I can work out a way.  Thanks for the advice. 

jimjames

Out of interest, did someone advise you to buy these shares? It doesn't sound like they really explained it if they did!

steampowered

I have some good news for you! You might not be able to sell the shares, but you can go ahead and claim the tax relief - if you haven't already claimed it.

You can claim the tax relief as soon as you can file a tax return for the year in which you make the investment.

As this investment was made some time ago, you can go ahead and submit the EIS3 form which you can probably find on the Crowdcube website to HMRC. HMRC will then pay you the income tax relief you are due which will be 30% of the amount you invested. 

You do NOT need to wait for 3 years to claim the tax relief. If a "EIS disqualifying event" happened within 3 years you might have to repay the relief, but that's unlikely to happen. 

You MUST claim the tax relief within 5 years or you'll lose it.

You have no ability to sell the shares right now. If the companies achieve an exit, or participate in the Crowdcube secondary market, you could sell your shares at that point. Equally there is a good chance that these companies will go bust - like many early stage companies do - in which case you will lose your investment. If the company goes under at least you'd be able to claim additional tax relief given that these were EIS investments. 

mostwelcome

Good point steampowered. Lucy_P, did you already claim tax relief? 

TheKDs

@steampowered so if I want to take the risk and invest on Crowdcube, IF it were successful and became a public company, or is purchased, I can then sell shares. Or keep them. Is that right? How long does that take if it ever happens?

wmb194

TheKDs said:

@steampowered so if I want to take the risk and invest on Crowdcube, IF it were successful and became a public company, or is purchased, I can then sell shares. Or keep them. Is that right? How long does that take if it ever happens?

If they list you could probably either keep them or have the option to sell them as some of the shares on offer for the IPO.

If the company is bought it'll depend on the terms of the deal. These days they're often all cash and shareholders are forced to sell their shares at the finally agreed price but it could be e.g., part cash and part shares or all shares in the acquiring company.

TheKDs

wmb194 said:

TheKDs said:

@steampowered so if I want to take the risk and invest on Crowdcube, IF it were successful and became a public company, or is purchased, I can then sell shares. Or keep them. Is that right? How long does that take if it ever happens?

If they list you could probably either keep them or have the option to sell them as some of the shares on offer for the IPO.

If the company is bought it'll depend on the terms of the deal. These days they're often all cash and shareholders are forced to sell their shares at the finally agreed price but it could be e.g., part cash and part shares or all shares in the acquiring company.

Forced to sell?