Tax breaks for Angel investing - The Enterprise Investment Scheme (EIS)

In recognition of the importance of Angel investing, the Government has introduced tax relief schemes to encourage more investments in small businesses and offset some of the risks.

The Enterprise Investment Scheme (EIS):

Under the Enterprise Investment Scheme (EIS) Angels can gain both income tax and capital gains tax relief to investors who subscribe for eligible shares in small unquoted companies that qualify under the scheme.

What relief is available for EIS investments

  • 30% income tax relief on up to £1,000,000 of investment per tax year (plus the possibility of carrying back income tax relief to the previous tax year)
  • Exemption from capital gains tax on disposal of EIS shares after the end of the three year relevant period
  • Allowing losses on the disposal of the EIS shares to be set off against either income or capital gains
  • Unlimited capital gains tax deferral in respect of the disposal of other assets, on amounts reinvested in EIS shares
  • Inheritance tax relief for EIS investments