You can claim back up to 30% of the value of your investment in the form of income tax relief on qualifying EIS investments per tax year. For example, if you make an investment of £100,000 you can save £30,000 in income tax, provided you have sufficient Income Tax liability to cover it.

As EIS allowances are allocated individually, a married couple could invest up to £2 million in a single tax year and be eligible for income tax relief. The shares must be held for at least three years from the date of issue. Tax relief will be given at the onset. However, if you dispose of the shares before the three years is up, the tax relief will be withdrawn.

Additionally, you can claim 30% tax relief on qualifying EIS investments up to a cap of £2 million per tax year as long as at least £1 million is invested in knowledge-intensive businesses, such as those in the life sciences sector. Therefore, a married couple could claim up to £4 million if investing in qualifying knowledge-intensive businesses.

However, it should be noted that people connected with the applicable company are not eligible for income tax relief on their shares.

For more information, please visit the HMRC website.

Any gains are free of Capital Gains Tax, so long as the shares are held for at least three years and the income tax relief was claimed on them. Shares can however be held for much longer than three years and therefore potentially enable the investor to accrue their CGT exemption over a long period of time, which can be very desirable.

For more information, please visit the HMRC website.

Capital Gains Tax will not have to be paid until a later date if you dispose of any kind of asset and used the gain you made on that asset to invest in shares in a company that qualifies for EIS. The investment must be made one year before or three years after the gain arose and the connection to the company is unimportant. Payment of the Capital Gains Tax will usually arise when you dispose of the EIS shares.

For more information, please visit the HMRC website.

If an EIS investment performs poorly and you lose money on your EIS investment, you may be able to claim loss relief. The investor can choose that the amount of the loss, minus the income tax relief given, can be set against income of the year in which they were disposed or alternatively, on income of the previous year instead of being set off against any capital gains. This will depend on which better suits the investor’s individual needs.

For more information, please visit the HMRC website.

There will generally be inheritance tax relief of 100% after two years on the value of EIS shares that have been held. Thus, reducing or eliminating any liability for inheritance tax in respect of such shares. Please note, if the shares are listed on a recognised stock exchange, this inheritance tax relief will not be available.

For more information, please visit the HMRC website.

You can treat some or all of the shares as being issued in the preceding tax year, as long as the limit for the value of EIS shares purchased had not been reached (£1 million) in that year.

This ‘carry back’ facility enables any relief to then be given against the income tax liability of that preceding year rather than against the tax year in which those shares were acquired.

For more information, please visit the HMRC website.

Explore EIS and SEIS eligible companies currently fundraising on the Regionally platform.

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**IMPORTANT** The above information is only meant to be a simple summary. This information should not be relied upon when investing into a company on the Regionally platform. There are a number of criteria that investors and companies need to meet in order to qualify for tax reliefs. Professional advice should be taken.

For more information, please visit the HMRC website.