English Country Inns, an enterprise investment scheme (EIS) that builds restaurant-style country pubs in the south of England, is offering another share subscription.
The EIS has already raised £6m under previous offers and has acquired six public houses at the cost of £3,961, 975. It is looking for further funds to buy more outlets and aims to produce capital growth for investors. Only established businesses which have a good trading record will be considered, which may minimise the risk of buying an unprofitable public house.
Public houses were chosen because the freeholds are qualifying buildings under EIS rules. These types of properties are available quite cheaply south of the M4, in areas such as Surrey, West Sussex and Somerset, which do not have the same choice of pubs and restaurants as cities.
High-net-worth clients who may have a capital gains tax (CGT) problem could find this product attractive as investing in an EIS allows CGT deferral of up to 40 per cent. It might also attract speculative, high-risk investors who are looking to add something different to their portfolios. However, the EIS depends on finding suitable public houses within the chosen area and their profitability as businesses, which is not guaranteed.