Enterprise Investment Scheme Relief

The UK tax regime affords certain significant tax advantages for investors in growth stage companies through the Enterprise Investment Scheme (EIS). Eligible individuals (eg business angels who satisfy relevant conditions) investing in new shares issued by a qualifying company can secure the following tax benefits:

capital gains tax (CGT) deferral relief – tax realised on the disposal of another asset can be deferred by reinvesting the gain realised on that disposal in EIS eligible shares;

income tax relief – 20% income tax relief can be secured in respect of the amount invested in EIS eligible shares, subject to an annual limit on the amount invested of £500,000;

CGT exemption – an exemption from CGT in respect of any capital gain realised on the disposal of the EIS eligible shares.