Short answer
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.
Investor conditions
- You must be an individual with UK income tax liability to use income tax relief.
- You must not be 'connected' with the company — broadly, not an employee or paid director (with limited exceptions) and not holding more than 30% of its shares, voting rights or capital, including holdings of associates.
- Shares must be full-risk ordinary shares, paid for in cash and fully paid up at issue.
- You must not receive value from the company, or enter arrangements to protect against the risk of the investment.
Company conditions
| Test | Standard company | Knowledge-intensive company |
|---|---|---|
| Gross assets (from 6 April 2026) | No more than £30m before and £35m after the share issue | Same |
| Employees (full-time equivalent) | Fewer than 250 | Fewer than 500 |
| Annual EIS / venture capital funding | Up to £10m in 12 months | Up to £20m in 12 months |
| Lifetime funding limit | £24m | £40m |
| Age (from first commercial sale) | Generally within 7 years | Generally within 10 years |
The company must be unquoted, have a permanent establishment in the UK, carry on a qualifying trade (certain activities such as property development, financial services and energy generation are excluded) and use the money raised for growth and development within two years.
Advance assurance
Companies can ask HMRC for advance assurance before raising funds. It indicates HMRC's view based on the information provided, but it is not binding if facts change and does not guarantee investors will receive relief.
Frequently asked questions
Can a director invest under EIS?+
Unpaid directors can usually qualify. Paid directors can qualify in limited cases, for example where they were not connected with the company before their first EIS share issue.
Do I have to be UK resident?+
You need UK income tax liability to use income tax relief. Individual circumstances vary and professional advice is recommended.
Sources
- GOV.UK — Venture capital schemes: apply for the Enterprise Investment Scheme
- GOV.UK — Venture capital schemes: tax relief for investors
- HMRC internal manual — Venture Capital Schemes Manual
Tax rules can change. The information on this website is general information only and is not personal financial, investment, tax or legal advice. It does not take account of your individual circumstances. See our editorial policy.
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.