What are the tax reliefs in EIS?
Generous tax reliefs currently available include inheritance tax relief (after two years), capital gains tax deferral relief and current and look back for 2 years income tax relief (minimum holding period of three years for the investments). The tax reliefs are subject to change and various conditions and potential investors are advised to take appropriate financial advice before considering an investment. Below is a summary of the current provisions: • 20% Income tax relief on new ordinary shares up to £500,000 per tax year. Shares must be held for three years. Relief is against the tax liability in the year the shares are issued but can be carried to the previous year for shares • Exemption from capital gains tax for any gains made on EIS qualifying shares held for three years or more Loss relief against income or capital gains for losses made on disposing of qualifying EIS shares after three years unlimited capital gains tax deferral CGT on gains can be deferred if the EIS share sub
