Enterprise Investment Scheme (EIS)
The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to
invest in new and growing companies. Investors can obtain generous income tax and
capital gains tax (CGT) breaks for their investment and companies can use the relief to
attract additional investment to develop their business. Individuals are entitled to
relief on investments in certain unquoted trading companies through EIS. A
junior version of EIS the SEIS is also available.
Maximum investment per annum: £1,000,000
Additional investment limit where investing in knowledge-intensive companies:
£2,000,000
Income tax relief: 30%
CGT treatment on disposal if held for 3 years: Exempt
Capital gains from the disposal of other assets may be deferred by making an EIS
investment.
Seed Enterprise Investment Scheme (SEIS)
The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared
to invest in new and growing companies. Investors can obtain generous income tax and
capital gains tax (CGT) breaks for their investment and companies can use the relief to
attract additional investment to develop their business. SEIS is a junior version of
EIS.
Maximum investment per annum: £200,000 1
Income tax relief: 50%
CGT treatment on disposal if held for 3 years: Exempt
An individual who makes a capital gain on another asset and uses the amount of the gain
to make a SEIS investment will not pay tax on 50% of the gain (subject to certain
conditions).
Capital gains from the disposal of other assets may be exempt up to £100,000* per
annum by making an SEIS investment.
1 Limits subject to Parliamentary approval.
Social Investment Relief (SIR)
Social Investment Relief (SIR) was designed to encourage private individuals to invest in
social enterprises including charities.
SIR closed to any new investments from 6 April 2023.
Venture Capital Trusts (VCTs)
Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in
smaller high-risk unquoted trading companies. VCTs operate by indirect investment
through a mediated fund. In effect they are very like the investment trusts that are
obtainable on the stock exchange, albeit in a high-risk environment. Individuals are
entitled to relief on investments in VCTs.
Maximum investment per annum: £200,000
Income tax relief: 30%
Dividend income: Exempt
Capital gains treatment on disposal: Exempt
(All reliefs are subject to detailed conditions being met.)