What is an EIS?

WHAT IS EIS?

The Enterprise Investment Scheme is designed to encourage private investment into growing British companies, by offering attractive tax reliefs.

It is one of the UK Government’s flagship policies for supporting British enterprise, stimulating approximately £1bn of private investment each year.

EIS TAX RELIEFS

If you invest in EIS-qualifying companies, and depending on your personal circumstances, you may benefit from the following EIS tax reliefs:

• 30% income tax relief – your income tax bill can be reduced by 30% of the amount invested into EIS. This relief can be applied to the tax year in which you purchase the shares, or carried back to the previous year.
• Tax-free gains – gains on EIS investments are not subject to Capital Gains Tax (CGT).
• CGT deferral – if you owe tax on another gain, for example from the sale of a share portfolio or investment property, you can defer the payment of CGT by investing the value of the gain into EIS-qualifying companies.
• Loss Relief – if your EIS investments underperform, you can offset any losses against other income or gains.
• Inheritance Tax relief – if held for two years, and still held at the investor’s death, EIS investments may be exempt from Inheritance Tax.

RISKS OF EIS INVESTING

EIS investments are always highly risky. They can also make your tax return calculations more complicated than usual. It is therefore a good idea to seek help from a professional adviser, if you are at all uncertain about making an EIS investment.

More information on the risks of EIS investing can be found in the Information Packs for our EIS investments, and you should read these carefully before deciding if EIS investment is right for you.

Click here to view our EIS investment platform information page.