Tax reliefs for individuals

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

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.

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.)