Glossary

Enterprise Investment Scheme (EIS)

The EIS is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.

The tax relief is available to individuals only, who subscribe for, shares in an EIS qualifying company (provided they are not connected with the company). There has to be a minimum investment of £500 worth of shares in any one company in any one tax year. The relief is 20% of the cost of the shares, to be set against the individual's income tax liability for the tax year in which the investment was made. Relief can be claimed up to a maximum of £400,000 invested in such shares.

There are a set of rules for qualifying companies. For example, a qualifying company may not be in the rental market, property market, etc.