Short answer
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.
What Investors' Relief does
Investors' Relief was introduced in 2016 to extend a reduced CGT rate, similar to Business Asset Disposal Relief, to investors who are not employees or officers of the company.
| Disposal date | CGT rate on qualifying gains |
|---|---|
| Before 6 April 2025 | 10% |
| 6 April 2025 to 5 April 2026 | 14% |
| On or after 6 April 2026 | 18% |
The lifetime limit on qualifying gains is £1 million for disposals on or after 30 October 2024 (previously £10 million).
Conditions
- The shares are ordinary shares newly issued to you, subscribed for in cash and fully paid, on or after 17 March 2016.
- The company is an unlisted trading company, or the holding company of a trading group, throughout your ownership.
- You have held the shares continuously for at least three years (beginning no earlier than 6 April 2016).
- You, and anyone connected with you, are not an officer or employee of the company or a connected company — with limited exceptions such as unpaid directors.
Investors' Relief vs EIS
| Investors' Relief | EIS | |
|---|---|---|
| Upfront income tax relief | None | 30% |
| CGT on gains | Reduced rate, £1m lifetime limit | Exempt if income tax relief kept |
| Company conditions | Unlisted trading company | Strict size, age, trade and funding tests |
| Investor shareholding | No 30% limit | Not more than 30% with associates |
Investors' Relief can be useful where a company does not qualify for EIS, or where an investor exceeds EIS limits. Shares cannot benefit from both the EIS CGT exemption and Investors' Relief on the same gain.
How to claim
Claim through your Self Assessment return. The deadline is the first anniversary of 31 January following the tax year in which the disposal took place.
Frequently asked questions
Is Investors' Relief the same as EIS?+
No. It is a separate CGT relief with no upfront income tax relief and different company conditions.
Does the £1m limit include gains under Business Asset Disposal Relief?+
No. Investors' Relief has its own separate £1m lifetime limit.
Sources
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.