At what rate is income tax relief given for an EIS investment?

30%
Investors can claim up to 30% income tax relief on EIS investments, which gives an incentive for some of the risk normally associated with funding small companies.

How is EIS tax relief calculated?

With an EIS an investor may be able to offset a loss against their income tax bill for the current or previous tax year. The amount of relief an individual can claim is worked out by multiplying the value of their effective loss and their marginal rate of income tax.

How much EIS relief can I claim?

When you invest in EIS, you can receive up to 30% income tax relief.

What is the time limit for claiming EIS income tax relief?

5 years
When to claim your relief If you invest with EIS , SEIS or SITR , you can claim relief up to 5 years after the 31 January following the tax year in which you made the investment.

How does EIS CGT deferral work?

Capital Gains deferral You can defer gains of any size, made up to three years before and one year after the EIS investment. You can defer a gain even if you have already paid the tax. Once you get your money out, the gain comes back into charge and you pay CGT at the prevailing rate.

Do you pay tax on EIS dividends?

1. How are EIS dividends taxed? While EIS offers a number of attractive tax reliefs when investing into early stage companies, if dividends are paid these are taxed as normal.

What is EIS tax relief?

The Enterprise Investment Scheme (EIS) is a longstanding UK government scheme, designed to help smaller higher-risk trading companies raise finance, by offering a range of tax relief to investors who purchase new shares in those companies.

Does EIS have CGT?

You normally pay no CGT when realising EIS shares, if you have claimed income tax relief on them and the companies still qualify.

How do I claim an EIS loss relief on my taxes?

To report this, the section “Unlisted shares and securities” should be completed, stating the amount of the loss to offset against income, both for the current tax year and the amount for the preceding year. You should also state the amount of the loss that is attributable to EIS.

When can you claim loss relief from EIS?

You must make the claim within one year of the 31st January following the end of the tax year in which the loss occurred. For example, for a loss which occurred in the 2019/2020 tax year you would need to make your claim by 31st January 2022.

Is CGT payable on EIS?

What is EIS relief?

What is EIS? The Enterprise Investment Scheme (EIS) is a UK government scheme that helps younger, higher-risk businesses raise finance by offering generous tax reliefs to investors. The scheme has been around since 1994, so is a well-established part of the UK tax landscape for investors.

How does tax relief work on EIS investments?

The relief works by reducing the investor’s income tax bill, knocking off an amount equivalent to 30% of the EIS eligible investment. For example, if you invest £100,000 in a company which is eligible for EIS, you can claim £30,000 back in income tax relief in the year you made your investment.

How do I claim loss relief on an EIS?

Claiming loss relief against income tax With an EIS an investor may be able to offset a loss against their income tax bill for the current or previous tax year. The amount of relief an individual can claim is worked out by multiplying the value of their effective loss and their marginal rate of income tax.

How does EIS work?

How does EIS work? 1 Income Tax relief. One of the main tax reliefs offered under EIS is income tax relief. Investors can claim 30% of their initial investment back as 2 Capital Gains Tax exemption. 3 Capital Gains Tax deferral. 4 EIS loss relief. 5 Carry-back rule.

What are the benefits of the Enterprise Investment Scheme (EIS)?

The Enterprise Investment Scheme offers several different forms of tax relief to investors who invest money into eligible companies. Briefly, EIS offers tax benefits in the following ways: 30% relief on Income Exemption from CGT on any gains after three years from the investment