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Occasions resulting in withdrawal of EIS income tax relief

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Occasions resulting in withdrawal of EIS income tax relief

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
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The enterprise investment scheme (EIS) is a scheme that encourages individuals to invest money in shares issued by qualifying unquoted companies with a permanent establishment in the UK.

A subscription for eligible shares of a qualifying EIS company is a tax efficient investment for the individual. The investor can benefit from the following tax reliefs:

  1. •

    income tax relief for the investor of up to 30% of the amount invested and disposals of EIS shares after three years may be free from CGT (see the Enterprise investment scheme tax relief guidance note)

  2. •

    capital gains deferral relief allows investors disposing of any asset to defer gains against subscriptions in EIS shares (see the Enterprise investment scheme deferral relief guidance note)

  3. •

    losses on EIS shares may be offset against taxable income (see the Losses on shares set against income guidance note)

  4. •

    EIS investments should qualify for IHT business property relief after two years’ ownership (see the BPR overview guidance note)

This guidance note discusses the occasions that may result

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