English Country Inns is an enterprise investment scheme (EIS) sponsored by Close Brothers Investment. It aims to raise money to build restaurant-style country pubs in England.
Public houses were chosen because the freeholds are qualifying buildings under EIS rules and these types of properties are available quite cheaply outside London. There is also a ready market for them as business people and the retired are always looking for places to eat and drink outside the capital. The pubs will have a family atmosphere and will target families at weekends.
Enterprise investment schemes allow investors to claim a tax credit of up to 20 per cent if shares are held for at least three years. Capital gains tax deferral of up to 40 per cent is another advantage.
High net worth clients who may have a capital gains tax problem could find this product attractive. It might also suit a shrewd investor looking for something speculative to invest in. However, it is unlikely to hold much interest for less sophisticated investors as they may be put off or confused by the concept, resulting in a reluctance to invest.