The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Tax reliefs under the enterprise investment scheme (EIS) can be summarised as follows:
EIS reliefs are available to individuals only, with the exception of EIS deferral relief which is also available to trustees.
EIS reliefs are available to UK residents only, with the exception of income tax relief, which may be claimed by non-UK residents with a UK income tax liability.
With the exception of EIS deferral relief, EIS reliefs are available only to outside investors.
For more detail on the tax reliefs, see the Enterprise investment scheme income tax relief and Enterprise investment scheme re-investment relief guidance notes.
Note that a sunset clause for EIS income tax relief has been introduced. This ensures that income tax relief will no longer be given to subscriptions made on or after 6 April 2025, unless the legislation is renewed by Treasury Order.
To obtain (and retain) EIS tax reliefs, certain conditions must be met by the investor for a minimum period of time. This is usually three years from the date of the share issue but, if the qualifying trade commenced later than this, then the period is three years from the date the qualifying trade commenced. For simplicity, these periods are collectively referred to throughout this guidance as ‘the minimum holding period’.
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