The Enterprise Investment Scheme (EIS) is a great way for growing companies to raise finance.
It is also an attractive proposition for investors because of the generous tax breaks on offer. Bishop Fleming has considerable experience of helping companies to raise finance and to qualify for the scheme, as well as advising potential investors on the options available. We ensure that investments are structured in the most tax efficient manner in order to maximise the reliefs available. Whether you are looking to attract finance or contemplating an investment opportunity, our cumulative knowledge, expertise and contacts in the market are available to you to provide you with the best advice. Download our EIS Factsheet for further information.
As long as the EIS-qualifying shares are retained for at least three years, an individual can reduce his income tax liability by an amount equal to 30% of the amount invested. An individual can invest up to £1m per tax year.
Capital gains tax on the disposal of another asset can be deferred where an individual acquires EIS-qualifying shares up to 12 months before or up to 36 months after the asset's disposal. There is no minimum period for which the EIS shares must be held.
As long as income tax relief was given and not subsequently withdrawn on the EIS-qualifying shares, no capital gains tax will be payable on their disposal provided they are held for at least three years.
Where EIS-qualifying shares are sold at any time at a loss, the loss (less any income tax relief previously given) can be set off against the investor's income in the year of disposal or the prior year.
EIS shares that are held for more than two years are normally exempt from Inheritance Tax.