The Enterprise Investment Scheme (EIS) makes early-stage investing particularly attractive for UK-resident tax payers. EIS tax reliefs can boost returns and mitigate some of the risks associated with investing in young, unquoted companies.

With EIS relief the most an investor can lose on an individual investment is 40%, or 40p in the £1. To find out more about this please contact one of the team.

EIS Tax Reliefs available to investors (subject to conditions):

Income Tax Relief

20% income tax relief on the amount subscribed for EIS-qualifying shares (up to £500,000 per tax year).  With the announcement of the 2009 Budget investors are now able to carry back 20% income tax relief to the previous tax year (which allows investors who did not utilise their EIS allowance last tax year to offset a potential tax bill for 2008/09).

Tax Free Capital Gains

Any capital gains made on the disposal of EIS-qualifying shares are tax free, provided they have been held for at least three years. 

CGT Deferral Relief

A taxable capital gain can be reinvested in EIS-qualifying shares thereby deferring tax payable until their disposal. There is no limit to the amount that can be deferred or the number of times the gain can be rolled over into new EIS investments.

Loss Relief

Any capital loss from an investment in EIS-qualifying shares can be offset against income tax in that or the preceding year, or offset against capital gains tax in that year, or carried forward.

IHT Relief

The investment is exempt from inheritance tax if the EIS-qualifying shares have been held for at least two years.

Claiming EIS Relief

EIS relief is claimed on an investment-by-investment basis. We provide our investors with the necessary EIS certificates obtained from the Inland Revenue by our portfolio companies. These certificates enable investors to claim EIS relief.

More information is available from the EIS Assocation of which MMC is a member.