The Enterprise Investment Scheme (EIS) is designed to help certain types of small higher-risk unquoted trading companies to raise capital, by providing a range of tax reliefs for investors.
There are five possible EIS tax benefits:
- Income Tax relief
- Capital Gains Tax exemption
- Capital Gains Tax deferral
- Loss relief
- Inheritance Tax relief
To qualify for any of these, shares must be subscribed for in cash, and a number of conditions must be met by both the company and the individual wishing to claim relief.
In our experience any company considering applying for EIS status should make an advance clearance application to the Small Companies Enterprise Centre, which deals specifically with these claims.
This is an area where our team has considerable experience. We advise our clients on the specific terms of this tax relief and in completing the various forms required for submission to HMRC.