Enterprise Investment Scheme (EIS)

* The extension of the annual limit for investment to £2 million only applies if the additional investment over and above £1 million is made into a “Knowledge Intensive” company.

• EIS relief is capped at the lower of 30% of the investment or the individual’s income tax liability.
• The relief applies to cash subscriptions of newly issued ordinary shares in unquoted UK companies that satisfy the HMRC criteria.
• Additional reliefs may apply such as the ability to carry back the investment to a prior tax year or deferral relief for capital gains and, after two years, 100% business property relief for Inheritance Tax.
• Relief may be withdrawn if the shares are sold within a certain period.
• Partial relief for the loss on the disposal of EIS shares can be relieved against income or capital gains.
• The shares may be sold free of capital gains tax, subject to certain conditions.
• If you are deemed to be connected with a company, EIS relief may not be available or could be withdrawn.
• Such investments should be discussed with an independent financial adviser who will considerthe risk of the particular investment.
• Professional tax advice should be sought before making this investment.