Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) was introduced on 1 January 1994 with the aim of encouraging new equity investment in trading companies by providing generous tax incentives to investors other than those already connected with the company. An investor may qualify for both income tax relief and capital gains tax relief in respect of an EIS investment. The capital gains tax relief in particular can be extremely valuable, as it can mean that the large gain that may potentially be made by investors in high tech companies when they realise their investment, may be exempt from taxation.

 

reference: Business Studies / Accounting. Accounts & Finance Glossary. Jim Riley BA(Hons) MBA FCA // tutor2u

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