In looking for alternative income tax planning ideas, London-based intermediary group Bespoke Financ...
In looking for alternative income tax planning ideas, London-based intermediary group Bespoke Financial Planning has turned to a little known product, the enterprise zone syndicate (EZS).
John Rawicz-Szczerbo of Bespoke Financial Planning, says that EZS investment is another viable option for the purpose of income tax planning, especially for clients prepared to consider channelling their tax money in the direction of a speculative commercial property development.
In general terms, an EZS is basically a syndicate of private investors that acquires a commercial property in a designated enterprise zone.
The designation of enterprise zones status, such as in London Docklands in the mid-1980s for example, was intended to assist in the raising of capital for the commercial regeneration of an area where traditional business had failed.
Under the ideal circumstances of an EZS investment, investors would benefit from at least two levels of tax reliefs (see table).
Rawicz-Szczerbo has been making use of EZSs for a number of years, but admits there is currently far more demand for quality product than there is supply in this marketplace.
When looking for suitable products, he has to be confident that any project is a valid commercial proposition that will stand on its own before considering any investment.
'There also has to be a sensible splitting of allowances between invest-ors and developers,' he says.
'One needs to be utterly confident that the prospective purchase price and rental levels of the property are realistic for that property in a location, and there is a realistic tenant demand.'
However, he stresses that an EZS is certainly not an appropriate product for a risk-averse client.
l For further details on EZS Investment see www.matrixgroup.co.uk
Lowest level since 2016
Subset of fintech
Just one-fifth not in favour
Armed forces charity
PI providers adding constraints to cover