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Tax Relief

Investor incentives

What tax relief is available

Investing in qualifying growth businesses can provide significant tax savings to individuals.


EIS

The Enterprise Investment Scheme (EIS) can allow investors in early-stage and growth businesses up to 30% Income tax relief and zero Capital Gains tax.

  • An annual limit of £1m total investment
  • No limit on capital gains
  • The shares must be ordinary shares, subscribed for and fully paid in cash, and held for at least three years.
  • There are restrictions on the ability of investors to be employees or directors of the company.
  • The shares must have been issued and subscribed for at arm’s length for genuine commercial reasons and not as part of a ‘tax avoidance’ arrangement.
You can find our more information at the EIS Guide .


Investors' Relief

Investors' Relief was introduced in 2016 and enables investors to pay just 10% Capital Gains Tax on exit:

  • A lifetime limit of £10m capital gains
  • It can apply to disposals of shares in an unlisted trading company or the holding company of a trading group.
  • The shares must be ordinary shares, subscribed for and fully paid in cash, and held for at least three years from 6 April 2016.
  • There are restrictions on the ability of investors to be employees or directors of the company.
  • The shares must have been issued and subscribed for at arm’s length for genuine commercial reasons and not as part of a ‘tax avoidance’ arrangement.

PLEASE NOTE:

To qualify for EIS/Investors' Relief, investors must be UK resident for tax purposes (or have UK tax liabilities) and subscribe cash for new shares in qualifying companies. Tax treatment is dependent on individual circumstances and may be subject to change. This content is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this content. It is also important to realise that investing in small companies always carries risks, including the loss of capital, illiquidity (the inability to sell assets quickly or without substantial loss in value), lack of dividends and share dilution. Investments should still be made as part of a diversified portfolio.

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