Income Tax Relief
For standard EIS fund investments, which are not HMRC approved (not the KI fund), you can claim the income tax relief investment in the current or preceding tax year via the EIS3.
Our Knowledge-intensive EIS is our approved fund, allowing tax relief to be carried back up to one year earlier compared to a typical fund. For tax purposes, the investment date is the fund's closing date, rather than its deployment date. Instead of applying tax relief to each individual investment, the fund is treated as a single entity, and you will receive a single EIS5 tax certificate.
Income Tax Relief Case Study - Ian
Capital gains deferral
You can use EIS to defer a capital gain, and the associated capital gains tax (CGT), for a period of 3 years prior to the EIS investment, or 1 year afterwards.
If the CGT has already been paid, then you can reclaim the CGT from HMRC.
It is notable that there is no limit to the size of the capital gain that you can defer.
There is no difference in capital gains deferral treatment between a standard EIS fund and Knowledge-Intensive (KI) HMRC approved fund structure.
Capital tax gains deferral case study - Shares
Capital tax gains deferral case study - Property
Inheritance tax relief
Two years after the purchase of EIS-qualifying shares they will qualify for business relief (BR), which was previously known as Business Property Relief (BPR).
Once these EIS shares are BR qualifying, they will be exempt from inheritance tax, and sits outside the taxable estate if the shareholder passes away.