EIS and SEIS and CGT and Hedging

It's the other man's grass, but it's your hedge.

Why take risks investing in equity crowdfunding? Opportunity cost is what matters. If you have a big CGT bill, you could use it as a big soft landing mattress for some risk-taking investment in early stage equity. 

This advice comes to you from iExpats. It's a little off-topic for a publication devoted to investment crowdfunding, but it introduces another reason and another kind of investor who can benefit from crowdfunding. That's the investor who's had a good year (for whatever reason) and sees their Capital Gains Tax (CGT) liability as an opportunity to do a bit of hedging.

We don't want to put ideas into the wrong people's heads. Your capital will be at risk. This is not something you should attempt unless you an experienced investor. Read the original article and note, in particular, the statement that you must follow the rules very carefully.

"Picking a scheme depends on the amount of capital gains a property owner needs to wash through the tax system. SEIS allows investments of £100,000 in a tax year, while EIS is open to up to £1 million."

If you are fortunate enough to have this problem, talk to an adviser you trust.