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Eis applications professional#

the company must not be listed on a recognised stock exchange, or plan to be listed, at the time of issuing shares.the company must have a permanent establishment in the UK.To be considered an EIS eligible company, the following conditions must be met: The rules for business angels are strict, however, so its advisable to seek advice from HMRC.įor an investor to be able to claim EIS, the company they are investing in must meet the EIS eligibility requirements and maintain their EIS eligible status for the duration of the shareholding. Business angels may still qualify for tax relief despite being paid for their services, provided that the angel director was not connected to the company at the time of issue of the shares. This exemption aims to encourage investment from business angels in the scheme, despite their roles as directors of the company. There is one exemption to the rule disqualifying connected persons employed in the company. You must not be using the scheme as a form of tax avoidance.You must not have any form of controlling interest in the company.You must not have any form of preferential shares.No partner or associate of yours may have interests in the company (including your spouse, relatives or previous business contacts).You must not be an employee, partner or ‘paid director’ of the company.

Your interest in the company must be no more than 30%.

If you are an investor, you must satisfy the following requirements to qualify for EIS: Before you think about applying, check that you meet the requirements, either as a company looking to attract an investor under the EIS scheme or as an investor hoping to profit from tax benefits. EIS is one of the more complex tax benefit options available.

The shares bought by the investor must be new shares which are not on the market.Īfter adhering to the above rules, both the company and investor must fulfil certain additional conditions to benefit from any of the tax reliefs under EIS.

The shares must be paid for in full, in cash, by the date of issue.

The investor must not be connected to the EIS company, either as an employee, partner, or remunerated director.

The investor may not carry-forward their EIS tax relief.

The investor must hold the shares for at least three years.

In each tax year, you may only invest a maximum of £1 million in qualifying companies (the number of qualifying companies is not limited).

The following rules apply to any claim for EIS:

Each branch of EIS tax relief carries its specific requirements, along with the standard stipulations.

Eis applications professional#

Such professional managers are also not low cost, making this option a more expensive venture.Īs shares eligible for EIS are not listed on the stock market, investors looking to not directly invest typically invest through a specialist broker or through an EIS fund. However, this can also be the main drawback of this option: you have less control over your investment. The benefit of a professional fund manager is that they will be doing constant research for you to make your investment decisions. A fund manager will build you an EIS investment portfolio, choosing in which companies you invest. However, it is usually a riskier venture as your investment relies on the success of that company specifically.Īlternatively, it is possible to invest through a fund manager. Investing directly into a single company allows the investor greater transparency and therefore, control in the investment opportunity.

Either, you can invest directly in an EIS qualifying company, or you can invest in an EIS fund. There are two options for investing with EIS.

Reduction or elimination of Inheritance Tax on eligible EIS shares held for two years.

Carry-back: applying tax relief to a previous year.

Loss relief when EIS shares are disposed of at a loss, either by being set against the investor’s capital gains or set against the income tax bill in the year of disposal.

Capital Gains Tax deferral when gains are reinvested in other EIS eligible companies.

Exemption from CGT on any gains after three years from the investment.

Briefly, EIS offers tax benefits in the following ways: The Enterprise Investment Scheme offers several different forms of tax relief to investors who invest money into eligible companies.

The future of the Enterprise Investment Scheme.

What can companies use EIS investment for?.

Are you eligible? (investors and companies).

These types of business tax reliefs have a huge array of benefits for investors, making the UK the perfect location to not only start a business but to expand one as well. By encouraging more investment, the scheme has significantly supported and boosted entrepreneurial activity in the UK.