New EIS to raise £20m to buy pubs

A new Enterprise Investment Scheme (EIS) is seeking to raise £20m to buy pubs. The Trident EIS Pub Fund is looking for £20m to buy run-down pubs in smaller urban areas outside city centres.

The funds will be divided between Maclay Inns, which runs 26 pubs mainly in Scotland, north of England-based Arizona Group and Midlands company Urban & Country Leisure.

They will buy pubs to refurbish, with the planned introduction of a food offer.

The EIS provides 20% income-tax relief on their initial investments. Investors also get capital gains tax deferral, meaning they could take advantage of rates dropping 40% to 18%, and benefit from inheritance tax relief after two years.

The fund is being overseen by Brewin Dolphin, which takes 6.5% of the money raised to cover set-up costs.

Pub managers receive a fee of 2% a year of all the funds invested in their establishments as well as 30% of the annual pre-tax profits of the pubs.

When the pubs are sold they will get a bonus of 30% of the amount the pub's value increase above inflation.