UNDERSTANDING

THE ENTERPRISE

INVESTMENT SCHEME (EIS)

The Enterprise Investment Scheme (EIS)
is a UK government initiative designed
to encourage investment in early-stage,
high-risk companies by offering substantial
tax benefits to investors.

Established in 1994, EIS has helped over 37,000 companies raise more than £29.9 billion in funding.

For investors, EIS offers one of the most generous tax incentive packages available anywhere in the world, significantly improving the risk-reward profile of startup investments.

[ Tax Benefits ]

COMPREHENSIVE EIS

TAX BENEFITS

Key Tax Advantages Offered Through the Enterprise Investment Scheme (EIS)

INCOME TAX RELIEF (30%)

• Receive 30% of your investment back as income tax relief

• Example: Invest £100,000, receive £30,000 reduction in income tax

• Can be carried back to the previous tax year

• Maximum investment of £1 million per tax year (or £2 million for knowledge-intensive companies)

CAPITAL GAINS TAX EXEMPTION

• Pay zero tax on any profits when you sell your EIS shares

• Minimum holding period of three years

• No upper limit on potential tax-free gains

LOSS RELIEF AGAINST INCOME TAX

• If investments underperform, claim loss relief against income tax

• Effective rate depends on your income tax band

• For a 45% taxpayer, maximum downside exposure is just 38.5% of capital invested

CAPITAL GAINS TAX DEFERRAL

• Defer payment of capital gains tax from other investments

• Reinvest gains from other assets into EIS-qualifying companies

• Gains can be deferred indefinitely by rolling into new EIS investments

INHERITANCE TAX EXEMPTION

• EIS shares held for at least two years become exempt from inheritance tax

• Part of Business Relief provisions

• Can be combined with other inheritance tax planning strategies

INCOME TAX RELIEF (30%)

• Receive 30% of your investment back as income tax relief

• Example: Invest £100,000, receive £30,000 reduction in income tax

• Can be carried back to the previous tax year

• Maximum investment of £1 million per tax year (or £2 million for knowledge-intensive companies)

CAPITAL GAINS TAX EXEMPTION

• Pay zero tax on any profits when you sell your EIS shares

• Minimum holding period of three years

• No upper limit on potential tax-free gains

LOSS RELIEF AGAINST INCOME TAX

• If investments underperform, claim loss relief against income tax

• Effective rate depends on your income tax band

• For a 45% taxpayer, maximum downside exposure is just 38.5% of capital invested

CAPITAL GAINS TAX DEFERRAL

• Defer payment of capital gains tax from other investments

• Reinvest gains from other assets into EIS-qualifying companies

• Gains can be deferred indefinitely by rolling into new EIS investments

INHERITANCE TAX EXEMPTION

• EIS shares held for at least two years become exempt from inheritance tax

• Part of Business Relief provisions

• Can be combined with other inheritance tax planning strategies

[ Eligibility Criteria ]

EIS ELIGIBILITY REQUIREMENTS

FOR COMPANIES

Check If Your Company Meets the EIS Requirements

UK-based with a permanent establishment in the UK

Not listed on a recognized stock exchange

Fewer than 250 full-time employees (or 500 for knowledge-intensive companies)

Gross assets not exceeding
£15 million before investment

Must be carrying out
a qualifying trade

Generally less than 7 years old (10 years for knowledge-intensive companies)

Cannot raise more than £12 million in total (£20 million for knowledge-intensive companies)

FOR INVESTORS

Who Can Invest Under the EIS?

Cannot be an employee of the company (directors may qualify under certain conditions)

Cannot have more than 30% stake in the company

Must hold shares for at least three years to retain tax benefits

Not available to trustees or corporate bodies

ALL OUR INVESTMENT OPPORTUNITIES ARE PRE-VETTED TO ENSURE EIS QUALIFICATION.

[ Step By Step ]

THE EIS INVESTMENT PROCESS

COMPANY SELECTION

01

Companies apply to HMRC for EIS advance assurance
Fundraising round opens to EIS investors

INVESTMENT

02

Investor reviews opportunity and decides to invest
Legal documentation completed
Funds transferred to the company

EIS3 CERTIFICATE

03

Company issues EIS3 certificates to investors (typically 3-6 months after investment)
This certificate is required to claim tax relief