Enterprise investment scheme
HMRC have updated ‘An Introduction to the Enterprise Investment Scheme (EIS)’ which provides an overview of the EIS for companies and potential investors.
The guide is divided into two main sections. The first deals with the EIS from the standpoint of an investor and the second part from a company’s perspective.
The scheme is intended to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to unconnected investors who purchase new shares in those companies. The recent coalition Government’s Budget announced changes to the related capital gains rules. It is no longer possible to defer existing capital gains under the EIS rules and for them to qualify for Entrepreneur’s Relief.
It is important that investors and companies are aware of the complicated rules which govern the EIS and ensure that the intended tax reliefs are made available as expected.