Enterprise Investment Scheme
Investments in exciting early-stage companies for investors who are targeting high growth.
What is the Enterprise Investment Scheme?
The Enterprise Investment Scheme (EIS) is a government-backed initiative offering tax reliefs to investors who buy new shares in qualifying companies.
This type of investing is for people who:
- Want to hold shares in small companies with potential to grow to many times their current value.
- Are comfortable taking on the risks of backing early-stage businesses and staying invested for the long run.
What is the Enterprise Investment Scheme?
The Enterprise Investment Scheme (EIS) is a government-backed initiative offering tax reliefs to investors who buy new shares in qualifying companies.
This type of investing is for people who:
- Want to hold shares in small companies with potential to grow to many times their current value.
- Are comfortable taking on the risks of backing early-stage businesses and staying invested for the long run.
Reasons to invest
High growth potential
An EIS investment can give investors access to companies they may not otherwise hold, and which have the potential to multiply in value.
Tax reliefs
There’s a package of valuable tax reliefs as an incentive for taking higher risk. These reliefs include upfront income tax relief, tax-free capital gains, loss relief, capital gains tax deferral, and inheritance tax relief.
Supporting UK businesses
Investing in an EIS helps innovative smaller companies to create jobs, prosperity and economic growth across the UK.
Complements long-term investments
An EIS can complement other long-term investments and help diversify an investor’s portfolio.
Risks to bear in mind
Capital at risk
The value of an EIS investment can fall as well as rise. Investors might not get back the full amount they invest.
Tax treatment
Tax treatment depends on individual circumstances and might change in the future. Tax reliefs depend on companies maintaining their EIS-qualifying status.
Long term investments
Investors need to hold shares for three years to keep any tax reliefs claimed. However, investors should be prepared to hold their shares for significantly longer to allow time for growth and exit.
Volatility and liquidity
Investments in smaller companies can fall or rise in value much more sharply than shares in larger, more established companies. They can also be harder to sell.
Octopus Enterprise Investment Schemes
Octopus Ventures Knowledge Intensive EIS Fund
Octopus Ventures EIS Service
Resources and guides
A complete guide to the Enterprise Investment Scheme
Learn about which companies qualify, the benefits, how to invest, risks, tax relief and transferral or inheritance.
Contact our team
Got a question?
Call us at 0800 316 2067
Reasons to invest
High growth potential
An EIS investment can give investors access to companies they may not otherwise hold, and which have the potential to multiply in value.
Tax reliefs
There’s a package of valuable tax reliefs as an incentive for taking higher risk. These reliefs include upfront income tax relief, tax-free capital gains, loss relief, capital gains tax deferral, and inheritance tax relief.
Supporting Uk businesses
Investing in an EIS helps innovative smaller companies to create jobs, prosperity and economic growth across the UK.
Complements long-term investments
An EIS can complement other long-term investments and help diversify an investor’s portfolio.
Risks to bear in mind
Capital at risk
The value of an EIS investment can fall as well as rise. Investors might not get back the full amount they invest.
Tax treatment
Tax treatment depends on individual circumstances and might change in the future. Tax reliefs depend on companies maintaining their EIS-qualifying status.
Long term investments
Investors need to hold shares for three years to keep any tax reliefs claimed. However, investors should be prepared to hold their shares for significantly longer to allow time for growth and exit.
Volatility and liquidity
Investments in smaller companies can fall or rise in value much more sharply than shares in larger, more established companies. They can also be harder to sell.
Venture capital investing focus: Tax year end seminars
5 January – 7 February 2023
20 UK locations ● CPD qualifying ● Food provided
Our investments place investor’s capital at risk.
Octopus Enterprise Investment Schemes
Octopus Ventures Knowledge Intensive EIS Fund
Octopus Ventures EIS Service
Resources and guides
A complete guide to the Enterprise Investment Scheme
Learn about which companies qualify, the benefits, how to invest, risks, tax relief and transferral or inheritance.
Have a client in mind?
Our planning scenario is designed to help you understand the kind of client who might be suitable for an EIS.
Clients looking for high growth opportunities
This scenario explains how an EIS could help clients diversify their investment portfolio, while benefitting from valuable tax reliefs.
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