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5 Compelling Reasons for EIS
30% Initial Income Tax Relief - claim back up to 30% relief against personal income tax on EIS investments to a maximum of £1m each per tax year. This allowance can be carried back to the previous tax year for offset against income tax. Shares must be held for a minimum of 3 years from the date they are issued. Actual cost 70 pence in the £1. Example
CGT Freedom - No Capital Gains Tax payable on disposal of shares after three years provided the EIS initial income tax relief was given and not withdrawn on those shares. No Capital Gains Tax to pay. Example
Inheritance Tax Relief - Shares in EIS qualifying companies will generally fall outside the estate for the purposes of Inheritance Tax purposes after two years, potentially reducing IHT liability to nil. Potential 40 pence in the £1 saving. Example
CGT Deferral Relief - is not capped at £1m and allows up to three-year-old capital gains tax to be rolled over into EIS companies and deferred indefinitely. Potential unlimited and indefinite deferral of existing an existing CGT bill. Example
Loss Relief - If EIS shares are disposed of at any time at a loss (after taking into account income tax relief), the loss can be set against either the investor's income tax (in the year of disposal or the previous year) or capital gains tax liability. Maximum exposure 35 pence in the £1 for a 50% tax payer. Example
I am proud to have chaired the EIS Association for the last eight years. I believe it fulfils a much needed role in encouraging private investment into small and growing British companies and fostering the innovative, entrepreneurial spirit that drives private enterprise.
During my tenure, the EIS Association has increased its membership fivefold and can count several successes in enhancements to the Scheme as a result of its representation of the industry. State Aid approval from Europe cemented the EIS’s position as an intrinsic part of the enterprise landscape in the UK.
The EIS is a vital element in the flow of investment funds from the private sector into small companies. The cost to Treasury is more than offset by the employment and tax revenues from employers and employees created by SMEs. The UK leads the venture capital industry in Europe and the relative success of the EIS in providing finance for small companies in Britain is considerably greater than similar schemes in other European territories. This is never more important than in times of economic difficulty where it is small companies which will lead the country out of recession.
We hope to continue our efforts in promoting the EIS and increasing its efficacy on all levels into a challenging future.
We are recognised by the Treasury and HMRC as the official trade body for the EIS industry and enjoy a positive and communicative relationship with both entities. We will continue our work to improve and simplify the EIS tax regime and look forward to your joining our efforts to promote and encourage this excellent tax efficient scheme.
Terms & Conditions
EISA is a company limited by guarantee registered in England and Wales registered company no. 2480430. The material set out in this website is directed only at persons in the UK. It is not to be regarded as an offer or invitation to buy or sell an investment, nor does it solicit any such offer or invitation, nor does it seek to endorse any particular investment product. Any information set out on this website is given in good faith, but no reliance should be placed upon the same. Applications to invest in any investment product referred to on this website should be made to the relevant promoter. Users are recommended to take appropriate financial advice before entering into any investment transaction. Whilst EISA endeavours to ensure that its members are suitably qualified to advise on EIS, the Association neither endorses any particular member, product or company/firm wishing to raise money under the EIS nor does it accept any liability for advice given.