EIS Flowchart

UK Government offers attractive tax breaks to individual investors investing in new shares of companies engaged in high-risk businesses. These schemes are designed to help companies raise money to fund business growth. It is very important for you to know that the investors will have their income tax benefit clawed back if within 3 years from the date of the initial investment, your business does not comply with HMRC requirements.

Two of such schemes are very popular- Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS). Both are different and so is the application process, but if you company is a new venture (i.e. established for 2 years) and gross assets do not exceed £200k, the SEIS could be more applicable to you.

Salient features of available tax reliefs under EIS scheme are:

  • Income tax relief at 30%
  • Roll over of capital gains on other assets
  • Loss relief available if the investment fails
  • Exemption from capital gains tax
  • Inheritance tax friendly investment

After recent changes in the legislation, qualification for EIS is no longer a simple matter and many of the rules relating to the investor, the business type, the company and the relationship between the two must be observed over a period as well as considered in detail at the outset. Our calculator is designed to guide you towards the likelihood of company qualification under the scheme and is not a substitute for a professional advice. We do not accept any responsibility for decisions taken based on the outcome of this calculator.

If, after completing the questions, EIS looks to be a possible option for a planned capital injection, please contact us to discuss the detail of your specific situation and we will be delighted to help.

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