Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) is a series of UK tax reliefs launched in 1994 in succession to the Business Expansion Scheme. It is designed to encourage investments in small unquoted companies carrying on a qualifying trade in the United Kingdom.

By the end of the 2014/15 tax year a cumulative total of £14.2 billion had been invested under the scheme into approximately 25,000 companies. In that year, in excess of £1.8 billion was invested under EIS.

Investment in companies that are not listed on a often carries a high risk of loss of capital, and low Market liquidity meaning that it may be difficult or time consuming to sell or realise the investment. The tax reliefs available under EIS are intended to offer investors some incentive to counterweigh those risks.

The EIS offers several different kinds of tax relief, available both to direct investors and investors through a managed EIS fund or portfolio service. They are conditional upon the company receiving investment being a qualifying company under the scheme. A brief summary of the tax benefits is as follows:

The rules for qualifying are complicated; for example, the following are some of the qualifications that must be met:

On 6 April 2012, the Seed Enterprise Investment Scheme (SEIS) was launched, with the goal to "stimulate entrepreneurship and kick start the economy."

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