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A complete guide to the Enterprise Investment Scheme (EIS)

Learn about which companies qualify, the benefits, how to invest, risks, tax relief and transferral or inheritance

The Enterprise Investment Scheme (EIS) is a government incentive that provides a valuable source of funding to early stage companies, while offering tax benefits to investors. This guide marks out which companies qualify, the benefits, how to invest, risks, tax relief and transferral or inheritance of EIS shares.

Introduction to EIS

Introduction to EIS

This section explains what EIS is, the purpose of the scheme and the benefits to EIS investors and
EIS-qualifying companies. We also cover the rules for EIS eligibility and how invested funds must be used.

1. What is the Enterprise investment scheme (EIS)?

2. What kind of company qualifies for an EIS investment?

Investing in EIS

Investing in EIS

Learn about the different ways of participating in EIS and why you might consider EIS as an investment vehicle. It’s important to know that EIS investments tend to be high risk, and this section also explains those risks.

5. Understanding the risks of EIS

EIS and tax

Income tax, capital gains tax and inheritance tax

Learn the basics about income tax, capital gains tax and inheritance tax,
and how they relate to EIS investments.

6. Income tax, capital gains tax and inheritance tax: the basics

EIS tax relief

EIS Tax Relief

EIS investors can benefit from five different tax reliefs if they invest in an EIS qualifying company:
income tax relief, tax-free growth, loss relief, capital gains deferral and inheritance tax relief.

9. How and when to claim EIS tax relief

Transferring or inheriting EIS shares

Transferring or Inheriting EIS shares

If you want to transfer ownership of an EIS investment, there are certain rules that apply to the tax reliefs. These rules define how the original investor and beneficiary are affected, which depends whether the EIS investment is a gift or inheritance.

11. Other beneficiaries and EIS shares

Before investing

Before investing

Learn about important factors that investors need to think about
when choosing the EIS investment that’s right for them.

12. Things to consider when choosing an EIS investment

Our investment products put 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 depends on individual circumstances and might change in the future. Tax reliefs depend on companies maintaining their EIS-qualifying status.

You’ll find our full guide to risks here

Investors need to hold shares for three years to keep any tax reliefs claimed. Investors should be prepared to hold their shares for significantly longer to allow time for growth and exit.

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.

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