Deferral relief, also known as re-investment relief, is one of the tax reliefs available under the enterprise investment scheme (EIS). For detail on other tax reliefs, see the Enterprise investment scheme tax relief guidance note.

Under deferral relief, an individual who sells an asset and reinvests the chargeable gain in subscribing for qualifying EIS shares can defer the capital gains tax liability on the asset by claiming EIS deferral relief. To obtain full deferral relief, the investor must invest an amount at least equal to the chargeable gain. If the investor invests an amount that is less than the chargeable gain, then the part not invested will not be deferred and it will be subject to CGT.

It may be worth considering not investing the whole of a gain and retaining a part to be covered by the annual exemption.

It is not a requirement that the investor should obtain EIS income tax relief for the expenditure. This means that an investor can claim deferral relief where there is no liability to tax or the amount