EIS—conditions for relief: issued shares, the funds raised and the arrangements in general
EIS—conditions for relief: issued shares, the funds raised and the arrangements in general

The following Tax practice note provides comprehensive and up to date legal information covering:

  • EIS—conditions for relief: issued shares, the funds raised and the arrangements in general
  • Conditions relating to shares
  • Conditions relating to funds raised
  • Annual limit
  • Total cap on risk finance
  • Cap on risk finance investment for 3 years after investment
  • Purpose and use of money raised
  • Conditions relating to the arrangements in general
  • Risk to capital condition
  • Meaning of qualifying business activity
  • More...

EIS—conditions for relief: issued shares, the funds raised and the arrangements in general

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

The Enterprise Investment Scheme (EIS) is designed to encourage investment in smaller, higher-risk trading companies by offering a range of tax reliefs to individual investors purchasing newly issued shares in those companies.

The EIS regime is prescriptive and sets out numerous requirements that must be met, including in relation to:

  1. the individual investors

  2. the issuing company, and

  3. the issued shares, the funds raised and the arrangements in general

This Practice Note focuses on the conditions that must be met in relation to the issued shares, the purpose of the issue of shares, and the amount and use of the money raised. These conditions are described in the context of the income tax relief provided for in Part 5 of the Income Tax Act 2007 (ITA 2007). References to the corresponding capital

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