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Married couples and EIS shares

Understanding the rules for EIS tax reliefs when investors transfer ownership of their EIS shares to a spouse or civil partner.

When shares are gifted

If the gift’s made to a spouse during the investor’s life, this isn’t considered a sale of shares for tax purposes.

Tax implications of the gift
for the original investor
Tax implications for the spouse
Income tax reliefNo implications – income tax relief is
not repayable even if gifted within
three years of investment.
If income tax relief is withdrawn
after gift, the spouse is responsible
for repayment.
Capital gains
tax relief
No implications – gifts between
spouses do not trigger
capital gains tax.
Growth is tax-free, provided the
shares have been held for a
combined total of three years
between the spouses.
Loss reliefNo implications – gifts between
spouses cannot crystalise a loss.
Loss relief is available against income
or gains, based on the investment
amount paid by the original investor
net of income tax claimed.
Capital gains
deferral relief
No implications – deferred gains
do not come back into charge.
Deferred gains are chargeable to
the spouse when the shares are sold.
Inheritance tax
relief via BR
No implications – gifts between
spouses are free from
inheritance tax.
The shares need to be held for
a further two years to qualify for
BR as part of the spouse’s estate.

When shares are inherited

If EIS shares are transferred to a spouse on the original investor’s death, the tax implications are different.

Tax implications for the
original investor on death
Tax implications for the spouse
Income tax reliefNo implications – inheritance tax
relief is not repayable even if
death is within three years
of investment.
If income tax relief is withdrawn
after transfer, the spouse does
not have to repay it.
Capital gains
tax relief
No implications – growth to
the date of death is tax-free,
even if death is within three
years of investment.
Any growth in the value after
the transfer is no longer free
from capital gains tax.
Loss reliefNo implications – death
does not crystalise a loss.
Loss relief is available against
capital gains only. The loss is
based on the fall in value
between the date of death
to the date of sale.
Capital gains
deferral relief
No implications – deferred
gains are eliminated on death.
There are no implications
after the transfer.
Inheritance tax
relief via BR
No implications – transfers
between spouses are free
from inheritance tax.
Shares will qualify for BR,
as long as the combined
ownership period of the
spouses is at least two years.

Please note: unmarried couples are treated as single individuals for tax purposes