Adviser Centre > EISs
EISs
An Introduction to Enterprise Investment Schemes (EISs)
What is an EIS?
The Enterprise Investment Scheme (EIS) was introduced by the UK government in 1994 to encourage investments in small, high-growth
potential companies by offering a range of tax reliefs to investors. This scheme is particularly beneficial for startups and early-stage businesses that might struggle to secure funding through traditional channels.
Key Features & Benefits
- Income Tax Relief: Investors can claim up to 30% income tax relief on investments up to £1 million per tax year, or up to £2 million if at least £1 million is invested in knowledge-intensive companies (KICs).
- Capital Gains Tax (CGT) Relief: Any profits made on the sale of EIS shares are exempt from CGT if the shares are held for at least three years.
- Loss Relief: Investors can offset losses against their income tax or CGT liabilities if the investment fails.
- Inheritance Tax Relief: EIS shares may qualify for 100% relief from inheritance tax if held for two years and at the time of death.
Historical Context & Impact
Since its inception in 1994, the EIS has supported over 31,000 companies and raised more than £22 billion in funding. This has had a significant impact on the UK economy by stimulating innovation, creating jobs, and supporting the growth of high-potential sectors such as technology and healthcare.
Qualifying Companies
For companies to qualify as EIS eligible investments, they must meet a strict set of criteria, ensuring they align with the objectives of the scheme. These
criteria cover aspects such as the company’s size, age, trading status, and location. To learn more about the specific requirements, you can visit the detailed guidelines provided by HMRC here.
Ready to learn more?
An introduction to VCTs
Venture Capital Trusts (VCTs) were introduced to encourage investment in smaller, high-risk companies by offering tax incentives to investors.
An introduction to SEISs
The Seed Enterprise Investment Scheme (SEIS), launched by the UK government in 2012, is designed to encourage investment in small, early-stage companies.
Live Opportunities
At Titan Alternatives, our commitment to identifying exceptional investment opportunities is underpinned by a rigorous selection process that prioritises value creation and provides diversification.
