I met with two other charity Legacy Officers recently to discuss the charities’ position when we are residuary beneficiaries of an estate which includes Enterprise Investment Scheme (EIS) investments.
In an estate that I am handling, EIS investments were made in 2017 and 2018 with four different providers and it is likely to be at least three years before there is any market enabling them to be sold. We have been unable to find a trustee to hold these assets so that the Solicitors can finalise the rest of the estate. The Solicitor Executors do not wish to hold the assets for some years to come.
It is not clear that the charities could hold them on trust. The forms to transfer an EIS do not appear to envisage charities holding an investment which is essentially for individuals, and the forms require independent advice to be taken on the suitability of investing in such a scheme when of course, the charity is just the beneficiary of an investment decision made by the Testator in his lifetime - we are not seeking to make a fresh investment.
There is also the question of whether a charity should hold a high risk investment.
I would very much appreciate it if anyone could assist or refer me to someone with the requisite knowledge, both for the estate I am dealing with at the moment, and more generally for the charity sector when we next face this issue. I would also be interested to know what advice Financial Advisers give potential investors about EIS should the investor die before the investment has been realised and whether as beneficiaries of an EIS, we are entitled to know in what companies the EIS has invested.
Hazel Jones
The Salvation Army