Property advisers Sapphire Capital Partners has created its Sapphire Building Services fund to allow investors to buy into the construction industry.
The Enterprise Investment Scheme (EIS) will conduct contraction projects in the UK, with investor returns being produced through the realisation of these projects.
Sapphire Capital Partners says that the maximum total subscription for the EIS is £1.5 million and that the scheme will provide tax incentives including 30 per cent upfront income tax relief on the amount subscribed, 100 per cent inheritance tax after two years, and Capital Gains Tax for the life of the investment.
Boyd Carson, partner at Sapphire Capital Partners, says that smaller, ‘niche’ construction companies have suffered due to the recession and that are struggling to win more ‘lucrative’ projects due to a weak capital base.
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He adds, ‘We therefore believe there is a strong opportunity for the type of construction company we are launching today – one that is well-capitalised and managed and can enter the market and benefit format he opportunities that are now available.
‘Our focus will be on a number of smaller projects rather than just one large one given that his approach would increase the risk exposure of the company. For investors we are focused on generating an attractive risk/return plus they will be bale to benefit from the tax incentives that come with the structure of the company, notably EIS Income Tax Relief and EIS CGT deferral.’
Sapphire Capital Partners was founded in 2009 and has locations in Belfast and London. It will be looking to achieve a return of £1.05 for each £1 invested before tax reliefs which could deliver an investor (net of tax) of 10.7 per cent per annum.