HM Treasury’s United Kingdom Budget 2007

Grant Thornton

Grant Thornton

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.

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