The Enterprise Investment Scheme (or EIS) is an incentive set up by UK government to encourage individuals to invest in small businesses.

It offers quite a few tax reliefs to investors:

1. Tax reliefs when you invest

• 30% Income Tax Relief: for £10,000 investment, your income tax is reduced by £3,000 that year. If your tax bill for the year is less than the relief you can “Carry Back” some or all of it to the previous tax year.
• Capital Gains Deferral Relief: your CGT can be deferred when the gains are invested in EIS qualifying company.

2. Tax reliefs when you exit your investment

• 100% Capital Gains Tax Exemptions: all your gains from selling your EIS shares are exempt from Capital Gains Tax. They must be sold 3 years or after and you must have claimed some Income Tax Relief
• 100% Loss Relief: your net losses can be set against your Income or Capital Gains Tax.

3. Additional reliefs

• 100% Inheritance Tax Relief: the inherited shares get full IHT relief in case of the investors death after 2 years.

How to invest in EIS companies

We strongly recommend you take advantage of EIS (and also SEIS, a similar scheme, but focused on even smaller, younger companies).

You can easily find EIS eligible companies through:

• Seedrs
• Crowdcube
• Wealth Club
• SyndicateRoom

The maximum amount you can invest is £1,000,000.

Can TaxScouts help with EIS reliefs?

Of course.

Our accountants can tell you exactly what information we need from you, then file your Self Assessment tax on your behalf.