The following Tax guidance note provides comprehensive and up to date legal information covering:
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:
the individual investors
the issuing company, and
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:
EIS—conditions for relief: individual investor conditions
EIS—conditions for relief: issued shares, the funds raised and the arrangements in general, and
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see Practice Notes: EIS—introduction to regime and description of tax reliefs and EIS—circumstances in which relief is withdrawn or reduced.
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