Answers · UK 2025/26

What is the Enterprise Investment Scheme (EIS) and who can invest?

EIS gives 30% income tax relief on up to GBP 1,000,000 invested per year (GBP 2,000,000 for Knowledge-Intensive Companies) in qualifying growth-stage companies. CGT on gains is deferred if reinvested via EIS. Companies must have under 250 employees and gross assets under GBP 15M. Shares must be held for 3 years.

Last updated: 20 June 2026Last reviewed: 20 June 2026How we verify

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The Enterprise Investment Scheme (EIS) is a UK government initiative that provides tax incentives to encourage investment in small and medium-sized high-risk companies. It sits above SEIS in the investor tax relief ladder, targeting companies that have grown beyond seed stage. Income tax relief 30% income tax relief on the amount subscribed, up to GBP 1,000,000 per tax year. For investments in Knowledge-Intensive Companies (KICs -- companies focused on R&D or innovation meeting specific criteria), the limit is GBP 2,000,000 provided the excess over GBP 1,000,000 is invested in KICs. Relief can be carried back one tax year. CGT deferral Unlike SEIS, EIS does not exempt CGT but defers it: if you have a capital gain and reinvest it into EIS shares within 1 year before or 3 years after the disposal, the gain is deferred until the EIS shares are sold. The deferred gain then comes back into charge (at the CGT rate applicable at that future date). CGT disposal exemption Gains on EIS shares held for 3+ years are exempt from CGT (not just deferred). This combines with the deferral to provide powerful planning. Loss relief Losses on EIS shares (net of income tax relief received) can be set against income or capital gains. Business Asset Disposal Relief (BADR) compatibility EIS shares can also qualify for BADR (10% CGT) if the investor is a director or employee and meets qualifying conditions -- subject to the GBP 1M lifetime limit. Qualifying company conditions -- Fewer than 250 full-time employees (or 500 for KICs) -- Gross assets under GBP 15M before share issue (GBP 16M after) -- Must be carrying on a qualifying trade (broad exclusions similar to SEIS) -- Must receive the EIS investment within 7 years of first commercial sale (10 years for KICs) Investor conditions -- Must not be an employee at time of investment (newly appointed paid director allowed in some cases) -- Must not hold more than 30% of the company -- Must hold shares for at least 3 years EIS vs SEIS: choose SEIS for very early-stage companies (higher relief at 50%), EIS for more established growth companies. Some funding rounds issue SEIS first, then EIS as the company grows.