Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) is a series of UK tax reliefs launched in 1994 in succession to the Business Expansion Scheme.[1] It is designed to encourage investments in small unquoted companies carrying on a qualifying trade in the United Kingdom.

Purpose

Investment in companies that are not listed on a stock exchange often carries a high risk. The tax relief is intended to offer some compensation for that risk. The EIS offers both income tax and capital gains tax reliefs to investors who subscribe for shares in qualifying companies. On 6 April 2012, the Seed Enterprise Investment Scheme (SEIS) was launched, with the goal to "stimulate entrepreneurship and kick start the economy."[2]

EIS Tax Benefits

Provisions

EIS Investments are exempt from inheritance tax after two years of holding such investment., subject to the Company being allowable under Business Property Relief ("BPR").[6]

Qualifying companies and individuals

The rules for qualifying are complicated; for example, the following are some of the qualifications that must be met:[5]

The company

The individual

References

  1. http://content.alliotts.com/cms/filelibrary/Enterprise_investment_scheme_and_venture_capital_trusts.pdf
  2. "Seed Enterprise Investment Scheme". SEIS Information. Retrieved 15 July 2012.
  3. "EIS Tax Benefits". EIS platform. Retrieved 11 September 2015.
  4. Powley, Tanya; Vincent, Matthew; Ross, Alice; Lodge, Steve; Moore, Elaine (23 March 2011). "Budget 2011: what it means for you". The Financial Times. Retrieved 15 July 2012.
  5. 1 2 3 HMRC
  6. "Enterprise Investment Schemes".

External links

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