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What is EIS (Enterprise Investment Scheme)?

We've updated this guide on 15th October 2020

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:

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.

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