Enterprise investment scheme ― introduction

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

The enterprise investment scheme (EIS) offers substantial tax incentives to investors in companies which qualify.

In summary, tax reliefs under EIS are as follows:

•
income tax relief for the investor of up to 30% of the amount invested
•
disposals of EIS shares after three years may be free from capital gains tax
•
capital gains tax deferral relief allows investors disposing of any asset to defer gains against subscriptions in EIS shares
•
losses on EIS shares may be offset against taxable income
•
EIS investments should qualify for IHT business property relief after two years’ ownership

Commercial and tax risk to consider when advising on EIS

The tax incentives for EIS investments are intended to encourage investment in high-risk companies. Therefore, there are stringent conditions associated with EIS reliefs and tax advice on EIS should be undertaken and supervised by a suitable experienced practitioner.

Terms of engagement for EIS work should be carefully drafted, in particular because conditions are tested on an on-going basis and tax advisers should ensure that

Continue reading

To read the full Guidance note, register for a free trial of Tolley+™

TAKE A FREE TRIAL

Popular Articles

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

Trusts and Inheritance Tax

BPR ― trading and investment businesses

BPR ― trading and investment businessesIntroductionThe basic qualification rules for business property relief (BPR) are illustrated in the Flowchart ― trading or investment business for BPR purposes.For an overview of BPR, see the BPR overview guidance note.Relevant business propertyThe main

14 Jul 2020 15:36 | Produced by Tolley Read more

Exemption ― insurance ― overview

Exemption ― insurance ― overviewThis guidance note provides an overview of the VAT treatment of insurance products and should be read in conjunction with the Insurance ― specific transactions and Exemption ― insurance ― brokers and agents guidance notes.Is insurance exempt from VAT?Supplies of

��Ƶ