The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
The EIS offers substantial tax incentives to investors in companies, which qualify.
In summary, tax reliefs under EIS are as follows:
Detailed information on these reliefs is included in the Enterprise investment scheme income tax relief guidance note.
The Government is planning to introduce a new EIS fund for knowledge-intensive companies from 6 April 2020. This is discussed at the end of this guidance note.
The tax incentives for EIS investments are intended to encourage investment in high risk companies. Therefore, there are stringent conditions associated with EIS reliefs, and tax advice on EIS should be undertaken and supervised by a suitably experienced practitioner.
For details of the conditions, see the Conditions to be met by the EIS issuing company and Conditions to be met by the EIS investor guidance notes.
Terms of engagement for EIS work should be carefully drafted, in particular because conditions are tested on an on-going basis and tax advisers should ensure that they are not liable for the results of any future action, which will be out of their control, which affects qualification for EIS.
An important part of the process will be to advise the investor of the risks involved with investments under the EIS from a tax perspective. The main thing to make the investor
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