Enterprise Investment Schemes (EIS) are an opportunity for investors to support the growth of small UK businesses while receiving attractive tax reliefs in return. They were introduced by the UK Government to encourage individuals to invest in this crucial area of the economy.
By investing in an EIS, the tax reliefs your clients can benefit from include:
- 30% income tax relief – this is on the amount subscribed up to £1,000,000 per tax year. This can even be carried back to the previous tax year. Investments must be held for at least 3 years.
- Tax-free capital gains
- Inheritance tax relief after two years – providing the shares are still held at death
- Capital gains tax deferral relief
The relief your clients get depend on their individual circumstances and the tax rules may change in future. HM Revenue & Customs law and practice can change over time and investors who are unsure about their tax status should get independent advice from a professional adviser.