CALCULO DE ESFUERZOS DEL VIENTO

The following is a summary of the main provisions of the EIS regime as far as is relevant to the Company. It does not set out any of the provisions in full and prospective investors are strongly recommended to seek professional advice as to the tax relief that their particular investment will attract and the tax consequences of selling or otherwise disposing of their shares.

Tax Reliefs (a) Income Tax

EIS relief allows qualifying individuals to deduct from their total liability to income tax an amount equal to tax at 30 per cent. on the amounts subscribed for qualifying shares in qualifying companies from their total liability to income tax for the year in which the shares are issued.

EIS relief is currently obtained at a rate of 30 per cent. on qualifying investments up to

£1,000,000 in any tax year. The spouse of the claimant is also entitled to claim EIS relief on his or her own investments.

EIS Income Tax relief reduces an Individual’s tax liability, and cannot exceed an amount which reduces the Individual’s tax liability for the year in question to nil.

Income Tax relief may be claimed in the tax year in which the shares are issued, or, by election, carried back to the previous tax year, subject to the annual investment limit for that year. The annual investment limit for the 2015/16 tax year is £1,000,000.

(b) Capital Gains Tax Exemption

To the extent that EIS relief is given and not withdrawn, there will be no capital gains tax charged in respect of the gain arising on the EIS shares on a disposal of the shares in the Company, provided those shares have been held for at least three years. Note that in order for the shares to be exempt from capital gains tax, some income tax relief must have been claimed and given.

(c) Capital Gains Tax Deferral Relief

The deferral relief available under EIS means that an investor may use investment in an EIS company to defer a charge to capital gains tax arising on a gain made on the disposal of any other asset in the period commencing one year before, and ending three years following, the disposal of that asset. The maximum gain that can be deferred is equal to the lower of the amount subscribed by an investor or the amount of the gain. The gain will then become chargeable at such time as the investor disposes of his EIS shares, or if the Company loses its EIS qualifying status within the three year qualifying period.

(d) Loss Relief

Where a loss is incurred by an investor on the first disposal of his shares, the loss (after deducting any EIS income tax relief claimed) may be set against either chargeable gains or against taxable income at the election of the investor. A claim to set the loss against income may be made against income of the tax year of the loss, or the preceding tax year.

The following example illustrates the position of an Investor who has subscribed £50,000 for EIS qualifying shares, and has claimed income tax relief only, in the event of a complete loss on the shares:

EIS Qualifying Investment £50,000

Less Income tax relief at 30% £(15,000)

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Net cost of investment £35,000

Income tax relief at 40% on net cost £(14,000)

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Maximum cash loss to investor £21,000

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This example assumes the Investor is liable to income tax at 40 per cent. in the year of the loss, and elects for the loss to be set against their income.

Persons Qualifying for Relief (a) Income Tax

An investor need not be UK resident, but relief will only be available against UK taxable income.

An investor must not be connected with the Company at any time in the period beginning two years before the issue of the shares and ending immediately before the third anniversary of the date on which the shares are issued.

Connection is defined by reference to the investor and his associates (i.e. spouse, lineal ancestor or descendent, a business partner and certain persons with whom there is a connection through a trust), and will prohibit the following qualifying for income tax relief under EIS:

(i) where the investor or one of his associates is an employee, partner or paid director of the Company, or a subsidiary of the Company;

(ii) where the investor or one of his associates directly or indirectly possesses or would be entitled to acquire more than 30 per cent. of the issued ordinary share capital, or the voting power of the Company or any subsidiary; or

(iii) where the investor or one of his associates possesses directly or indirectly such rights as would, in the event of a winding up of the Company or any subsidiary or in any other circumstances, entitle him to receive more than 30 per cent. of the assets of the Company or any subsidiary which would be available for distribution to equity holders (i.e.

shareholders and certain types of loan capital holders).

(b) Capital Gains Tax

An investor must be resident or ordinarily resident in the UK at the time of accrual of the capital gain and at the time when he makes the EIS qualifying investment in the Company, in order to claim the capital gains tax relief and/or deferral relief.

For the purposes of residency, the investor must not be regarded by any tax treaty as resident in another country.

Claims

Investors need to make a formal claim for EIS relief or EIS deferral relief from their individual tax office.

The claim is made on receipt of Form EIS3 from the Company. Form EIS3 is a certificate issued by the Company, with the approval of HMRC, confirming that it is a qualifying company for EIS purposes.

The Company proposes to submit its application to HMRC to issue an EIS3 as soon as practicable after the share issue.

An investor’s claim must be submitted to his tax office no later than the fifth anniversary of 31 January following the year of assessment in which the shares were issued.

Withdrawal of Relief

The investor should note that there are a number of anti-avoidance provisions that can apply to the reliefs described above, but a description of these is beyond the scope of this summary. If you are in any doubt about whether such provisions could affect your investment, we strongly recommend that you seek professional advice.

(a) Income Tax

If the Company ceases to be a qualifying company within three years, commencing with the issue of the shares all EIS relief will be withdrawn.

If shares are disposed of within three years of their issue, relief will be withdrawn in respect of those shares to the extent of the amount or value of the consideration received for them. The exception to this is if the disposal is not made at arm’s length, in which case all relief in respect of the shares will be withdrawn.

EIS relief will be withdrawn if value is received by an investor from the Company or a person connected with the Company (or in more limited circumstances, by other shareholders) within the period commencing one year before the share issue and ending three years after it.

(b) Capital Gains Tax

The gain that is deferred becomes a chargeable gain when an investor disposes of his or her shares, otherwise than to a spouse, or ceases to be UK resident within the three years commencing with the issue of the shares (or if later the commencement of the relevant trade).

EIS deferral relief is withdrawn if the Company ceases to be a qualifying company, the Company ceases to carry on a qualifying business activity or the proceeds of the share issue are not used within 24 months of the share issue. The deferred gain is deemed to arise on the relevant date on which such circumstance occurs.

EIS deferral relief will be withdrawn if value is received by an investor from the Company or a person connected with the Company (or in more limited circumstances by other shareholders) within the period commencing one year before the share issue and ending three years after.