The Enterprise Investment Scheme (EIS) is designed to help smaller, higher-risk companies raise finance by offering tax relief on new shares of companies that qualify. For the investor, it’s a tax-efficient way to invest in small companies.
You can invest up to £1,000,000 in any tax year and receive 30% tax relief, as long as you stay invested for at least three years. An additional £1,000,000 is eligible for the same 30% relief for investment in “knowledge-intensive” companies.
On top of that, Capital Gains Tax on EIS shares can be deferred if you reinvest the gains into an EIS-eligible company. Or - if you make a loss on your investment - you can offset the loss against your tax bill for that year or the previous year.
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