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EIS Tax Reliefs

To incentivise investment for high risk start-ups, the UK government offers tax reliefs under the Enterprise Investment Scheme (EIS)

If a company is judged to be EIS compliant - in general terms it must be a high risk start-up - investors can get the following reliefs:
​​
  1. Initial Income Tax : receive 30% of investment back from HMRC in the first tax return after investment
  2. CGT : if the investment succeeds, pay no CGT on any profits
  3. Further Income Tax: if the investment fails, 45% of the remaining investment can be offset against income tax
  4. Inheritance Tax: shares in EIS companies generally qualify for 100% tax relief. I.e. can be passed on without paying 40% IHT
  5. CGT Deferral: if an investor sells an investment they can defer paying  CGT by reinvesting any gain into an EIS company

End Result: for higher rate tax-payers, every £200k committed under EIS represents a maximum potential loss of £77,000 as below
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Important Notes:
-   
The tax reliefs outlined assume a higher rate tax payer
-    There are conditions to receive the tax benefits above - e.g. hold shares for at least 3 years
-    W
e recommend all readers seek professional advice before deciding to make any EIS investment 

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Vanneck Ltd is authorised and regulated by the Financial Conduct Authority
Registered in England and Wales. Company Registration 5473044
  • Equity Funds
    • Vanneck Defensive >
      • Overview
      • Factsheet
      • Prices
      • Investing
    • Vanneck Equity >
      • Overview
      • Factsheet
      • Prices
      • Investing
    • Vanneck Global Growth >
      • Overview
      • Factsheet
      • Prices
      • Investing
  • Vanneck EIS
    • Overview
    • EIS Ethics Policy
    • EIS Tax Reliefs
  • Review
  • Books
  • Blog
  • Governance
    • ESG Thoughts
    • Privacy Policy
    • Pillar 3 Disclosures
    • UK Stewardship Code
    • Execution Disclosure