Budget 2007

Enterprise Investment Scheme (EIS)¹

Income tax

• Relief at 20% of subscription²
• Relief on subscriptions of up to £400,000 per tax year.
• Minimum subscription £500 per scheme per tax year unless through an approved fund.
• One year carryback available for the lesser of £50,000 and 50% of amount invested in shares issued before 6 October in tax year.
• Holding period 3 years from later of issue date and commencement of relevant trade.

Capital Gains Tax

• Where income tax relief has been obtained original investor exempt from capital gains tax on disposal after 3 years.
• Chargeable gains on any assets can be deferred by reinvestment into EIS shares.
• Losses on the first disposal of shares can be relieved against income or capital gains.
• No limit on amount of gains that may be reinvested.
• Reinvestment must occur between 1 year before and 3 years after date of gain.
• Taper relief period continues on serial EIS investments from 6 April 1999, provided first EIS shares acquired after 5 April 1998.

For further information take a look at the in-depth article on the Enterprise Investment Scheme

¹ Qualification rules are complex, HM Revenue & Customs approval required
² Limited to tax liability for year of investment

The figures shown here are subject to ammendment as the Finance Bill passes through Parliament.

This information has been prepared only as a topical guide to tax and personal financial matters. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material contained in this publication.