EIS—conditions for relief: issuing company

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

  • EIS—conditions for relief: issuing company
  • Conditions relating to issuing company
  • Issuing company unquoted
  • Gross asset limit
  • Employee limit
  • Establishment in the UK
  • Financial health
  • Trading requirement
  • Only issuing company or qualifying 90% subsidiary may carry on relevant qualifying trade, preparation work or R&D
  • Control and independence condition
  • More...

EIS—conditions for relief: issuing company

IP COMPLETION DAY: The Brexit transition period ended at 11pm on 31 December 2020. At this time (referred to in UK law as ‘IP completion day’), transitional arrangements ended and significant changes began 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 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

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