The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The enterprise investment scheme (EIS) offers significant tax reliefs to encourage individuals to invest money in qualifying shares issued by qualifying unquoted companies. The scheme is designed to encourage investment in small, young companies that need investment to grow but have limited access to market finance, often because they are perceived as high-risk. EIS offers income tax reliefs and capital gains tax (CGT) reliefs to individual investors who subscribe to new shares in such companies.
A subscription for eligible shares of a qualifying EIS company is therefore a tax efficient investment for the individual. The investor can benefit from the following tax reliefs:
EIS income tax relief
loss relief against CGT or income tax
CGT deferral relief
These reliefs are considered in further detail below. A worked example of the reliefs is provided in SEIS and EIS ― overview guidance note.
Business property relief (BPR) may also be available if the shares are held for the qualifying period for BPR. See the BPR overview guidance note.
The conditions for a valid investment are discussed in the Conditions to be met by the EIS issuing company and Conditions to be met by the EIS investor guidance notes.
It is possible to make investment through an approved EIS investment fund. From 6 April 2020, these must be focused on knowledge intensive companies. For more details, see the Enterprise investment scheme ― introduction guidance note and Simon’s Taxes E3.137.
A sunset clause for EIS income tax relief has been introduced. This means that EIS tax relief will no longer be available for subscriptions made on or after 6 April 2025, unless the legislation is renewed by Treasury Order.
For subscriptions made on or after 6 April 2011, the income tax relief available is 30% of the lower of:
the amount subscribed for the shares
the permitted maximum
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
Why is this important?Tax-free amountEach individual, whether or not they are resident in the UK, is entitled to an annual exempt amount when calculating the taxable amount of their chargeable gains for the tax year (although see the exceptions below). The annual exempt amount is also known as the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.