Tax reliefs for individuals

EIS, SEIS, VCTs and SIR.

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS. A junior version of EIS the SEIS is also available.

Maximum investment per annum: £1,000,000

Additional investment limit where investing in knowledge-intensive companies: £2,000,000

Income tax relief: 30%

CGT treatment on disposal if held for 3 years: Exempt

Capital gains from the disposal of other assets may be deferred by making an EIS investment.

Seed Enterprise Investment Scheme (SEIS)

The Seed Enterprise Investment Scheme (SEIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. SEIS is a junior version of EIS.

Maximum investment per annum: £200,000 1

Income tax relief: 50%

CGT treatment on disposal if held for 3 years: Exempt

An individual who makes a capital gain on another asset and uses the amount of the gain to make a SEIS investment will not pay tax on 50% of the gain (subject to certain conditions).

Capital gains from the disposal of other assets may be exempt up to £100,000* per annum by making an SEIS investment.

1 Limits subject to Parliamentary approval.

Social Investment Relief (SIR)

Social Investment Relief (SIR) was designed to encourage private individuals to invest in social enterprises including charities.

SIR closed to any new investments from 6 April 2023.

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.

Maximum investment per annum: £200,000

Income tax relief: 30%

Dividend income: Exempt

Capital gains treatment on disposal: Exempt

(All reliefs are subject to detailed conditions being met.)

Any reference to a partner is to a member of the Limited Liability Partnership. A list of the partners is available for inspection at the registered office.
Registered to carry on audit work in the UK and Ireland and regulated for a range of investment business activities by The Institute of Chartered Accountants of Scotland.
Details about our audit registration can be viewed at www.auditregister.org.uk for the UK, under reference number 4235.


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