Answers · UK 2025/26
How does EIS tax relief work in the UK?
EIS (Enterprise Investment Scheme) gives 30% Income Tax relief on up to £1 million invested per year (£2 million for knowledge-intensive companies). Shares held 3 years are CGT-exempt. Gains on other assets can be deferred by investing in EIS. Loss relief reduces downside risk significantly.
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The Enterprise Investment Scheme (EIS) is a government scheme offering substantial tax reliefs to investors backing qualifying UK trading companies, typically growth-stage businesses larger than those eligible for SEIS. For 2026/27 the main reliefs are: Income Tax relief at 30% on investments up to £1 million per tax year, rising to £2 million if the excess above £1 million is invested in knowledge-intensive companies (KICs), which are defined by their R&D spend or graduate workforce. So an investment of £50,000 in qualifying EIS shares can reduce your Income Tax bill by £15,000, subject to having enough tax liability. The relief is claimable in the year of investment or carried back one year. CGT exemption: gains on EIS shares held for at least 3 years are completely free of Capital Gains Tax, regardless of size. CGT deferral relief: if you make a capital gain on any asset, you can defer paying CGT on it by reinvesting the gain into EIS shares within 1 year before or 3 years after the disposal. The deferred gain becomes payable when you sell the EIS shares. IHT relief: EIS shares qualify for Business Property Relief (BPR) after being held for 2 years, making them 100% exempt from Inheritance Tax -- useful for estate planning. Loss relief: losses can be set against income rather than just capital gains, reducing the effective downside. EIS companies must be unquoted, have gross assets below £15 million before investment, and carry on a qualifying trade. Investors must not be connected to the company (broadly, owning more than 30% of it). HMRC must approve the EIS status, and investors receive an EIS3 certificate to claim relief. Use a capital gains tax calculator to model the tax saving from EIS CGT deferral.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.