EIS—conditions for relief: issuing company
EIS—conditions for relief: issuing company

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

  • EIS—conditions for relief: issuing company
  • Conditions relating to issuing company
  • Meaning of period B
  • Meaning of qualifying 90% subsidiary
  • Meaning of qualifying subsidiary

The 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 applicable to the issuing company and its group (if any). Note, however, that the issuing company will also have to take account of all the other conditions for EIS relief set out in the further Practice Notes referenced below. The conditions are described in the context of EIS income tax relief provided for in Part 5 of the Income Tax Act 2007 (ITA 2007). References to the corresponding capital gains tax (CGT) rules are also provided where relevant.

For details of the other conditions, see Practice Notes:

  1. EIS—conditions for relief: individual investor conditions

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

  3. EIS—conditions for relief: qualifying trades

For an explanation of the various tax reliefs available to qualifying EIS investors, see Practice Notes: EIS—introduction to regime and description of tax reliefs and EIS—circumstances in which relief is withdrawn or reduced.

Conditions relating to issuing