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The EIS Guide
Plain-English explanations of the Enterprise Investment Scheme, written from HMRC and GOV.UK guidance and reviewed regularly. General information only — not tax advice.
Fundamentals
What is EIS? The Enterprise Investment Scheme explained
EIS, or the Enterprise Investment Scheme, is a UK government scheme designed to encourage investment in qualifying smaller businesses by offering investors certain tax reliefs, subject to qualifying conditions.
Last reviewed 2026-10-04
Enterprise Investment Scheme (EIS): the complete guide
The Enterprise Investment Scheme (EIS) is a UK government scheme, run by HMRC, that gives individuals tax reliefs when they buy new shares in qualifying unquoted trading companies. Reliefs include 30% income tax relief, capital gains tax exemption and deferral, and loss relief — all subject to strict conditions and a minimum three-year holding period.
Last reviewed 2026-10-25
How does EIS work? A step-by-step explanation
EIS works by giving investors tax reliefs in return for buying new shares in qualifying small companies. A company raises money by issuing shares, confirms its EIS status to HMRC, and gives investors an EIS3 certificate. Investors then claim 30% income tax relief and must hold the shares for at least three years to keep it.
Last reviewed 2026-10-25
EIS vs SEIS: the key differences
SEIS is for very early-stage companies and gives 50% income tax relief on up to £200,000 a year. EIS is for slightly larger, more established companies and gives 30% relief on up to £1 million a year (£2 million for knowledge-intensive companies). Both carry high risk and both require shares to be held for at least three years.
Last reviewed 2026-10-25
Tax relief
EIS tax relief: how the reliefs work
Qualifying EIS investments can attract income tax relief of 30% of the amount invested, along with possible capital gains tax exemption, CGT deferral and loss relief. Every relief depends on the investor and the company meeting HMRC's conditions.
Last reviewed 2026-10-04
EIS income tax relief: 30% relief explained
EIS income tax relief lets you reduce your income tax bill by 30% of the amount you invest in qualifying EIS shares, up to £1 million a year (£2 million if the excess is in knowledge-intensive companies). You must hold the shares for at least three years, and relief cannot exceed the income tax you owe.
Last reviewed 2026-10-25
EIS capital gains tax relief: the CGT exemption
Gains you make when you sell EIS shares can be free of capital gains tax if you received income tax relief on them that has not been withdrawn, and you held them for at least three years. This exemption is separate from EIS deferral relief, which postpones gains on other assets.
Last reviewed 2026-10-25
EIS capital gains deferral relief explained
EIS deferral relief lets you postpone capital gains tax on a gain from any asset by reinvesting the gain in qualifying EIS shares between one year before and three years after the gain arose. There is no upper limit. The deferred gain becomes chargeable again when the EIS shares are disposed of, unless it is deferred again.
Last reviewed 2026-10-25
EIS loss relief: how losses on EIS shares are relieved
If you dispose of EIS shares at a loss, the loss — reduced by any income tax relief you kept — can be set against your income in the year of disposal or the previous year, or against capital gains. This can reduce your net loss, but you will still lose a substantial part of what you invested.
Last reviewed 2026-10-25
What is Investors' Relief? CGT relief for external investors
Investors' Relief is a capital gains tax relief for external investors who subscribe for new shares in unlisted trading companies and hold them for at least three years. It reduces the CGT rate on qualifying gains — 18% for disposals from 6 April 2026 — up to a £1 million lifetime limit. It is separate from EIS.
Last reviewed 2026-10-25
Eligibility
EIS eligibility: investor and company conditions
To claim EIS relief, an individual must not be connected with the company and must hold qualifying shares for at least three years. The company must be unquoted, below set size and age limits, carry on a qualifying trade and use the money for growth and development.
Last reviewed 2026-10-04
Who can invest in EIS? Investor eligibility explained
Any individual can buy EIS shares, but to claim income tax relief you need a UK income tax liability and must not be 'connected' with the company — broadly, not a paid employee or director and not holding more than 30% with your associates. Because EIS investments are high risk, they are usually promoted only to high-net-worth, sophisticated or professional investors.
Last reviewed 2026-10-25
EIS qualifying investments: what makes shares and companies qualify
An EIS qualifying investment is a subscription for new, full-risk ordinary shares, paid in cash, in an unquoted company with a UK permanent establishment that carries on a qualifying trade, meets size, age and funding limits, and passes the risk-to-capital condition.
Last reviewed 2026-10-25
Risk
Process
How to invest in EIS: routes, checks and practical steps
You can invest in EIS directly in a single company, through an EIS fund or portfolio service, or via a crowdfunding platform or adviser. Before investing, check the company's EIS position, read the investment documents, understand the risks and consider professional advice.
Last reviewed 2026-10-25
EIS schemes explained: funds, portfolios and direct investment
'EIS schemes' usually refers to the different structures for investing under the Enterprise Investment Scheme: direct investment in a single company, discretionary EIS portfolio services, HMRC-approved EIS funds and crowdfunding platforms. The tax reliefs are the same, but timing of relief, diversification, fees and control differ.
Last reviewed 2026-10-25
The EIS investment process: from subscription to exit
The EIS investment process runs from due diligence and subscription, through the share issue and the company's EIS1 compliance statement, to receiving your EIS3 certificate and claiming relief. You then hold the shares for at least three years, and possibly much longer, until an exit.
Last reviewed 2026-10-25
In preparation
We publish a guide only once it adds genuine value and has been reviewed. These topics are being written:
- — EIS investment limits
- — EIS holding period
- — EIS tax certificates (EIS3)
- — EIS exit strategies
- — EIS advance assurance
Interested in EIS investing?
If you are a high-net-worth, sophisticated or professional investor, you can request investor information from us.
Capital at risk. EIS investments are high risk and illiquid. Tax reliefs depend on individual circumstances and qualifying conditions.