The Enterprise Investment Scheme ("EIS") was set up to provide incentives for private investment in small unquoted companies (including AIM). The changes in the 2004 Budget now leave the EIS as the only tax efficient investment offering a capital gains tax deferral.
EIS tax reliefs are generous. There is no limit on the amount of capital gains that can be sheltered under EIS. The maximum that can be invested in EIS in the tax year 2006/07 and following has been increased from £200,000 to £500,000
Another attraction of the EIS is the ability, for shares issued after 5 April but before 6 October, to claim for some of them to be treated as though they had been issued in the preceding tax year, obtaining the relief applicable to them as a reduction in the income tax liability for that year. The most that can be treated in this way is the lesser of half the amount invested in this period or £50,000.
Available reliefs for investors under the EIS scheme:
Up to 32% offset against income tax or CGT liabilities
Not available
Important
These notes are only intended to provide a brief summary of the tax advantages available current legislation and HM Revenue & Customs practice. Legislation and Revenue practice may change. The rates of tax and tax reliefs may be altered. The levels and bases of reliefs from taxation may change. The tax reliefs referred to are thos currently available, and are personal to the investor. Their value depends on the individual circumstances of the investor. Investors are advised to obtain advice from their own professional advisers as to their tax position in respect of their own portfolio.
Disclaimer
All information provided within the WirelessMatch website is intended for guidance purposes only. The content of the website is of a general nature and WirelessMatch Ltd does not represent or warrant that the content is accurate, complete or current. It is recommended that any user seeks professional, independent advice on any issue before taking action. WirelessMatch Ltd cannot accept responsibility for loss arising from any action taken as a result of information supplied on the site, including errors and omissions.
