EIS (Enterprise Investment Scheme)
UK tax glossary · Last reviewed: April 2026
The Enterprise Investment Scheme offers 30% Income Tax relief on investments up to £1 million per tax year (£2 million if invested in Knowledge Intensive Companies). You must hold the shares for at least three years to retain the relief.
EIS also provides CGT deferral — a gain from another asset can be deferred by reinvesting into EIS shares. EIS shares are exempt from CGT if held for three years, and qualify for Business Relief after two years, making them useful in inheritance tax planning.
HMRC must grant advance assurance that a company qualifies before investors can rely on the relief. Investors should treat EIS as high-risk: these are typically early-stage businesses with high failure rates.
Worked example
Invest £20,000 in an EIS company. Income Tax relief: £20,000 × 30% = £6,000 reduction in tax bill. Net cost of investment: £14,000. If shares triple after 3 years, CGT on the gain is zero (EIS exemption). If company fails, loss relief offsets other income.
Common questions
Can I carry back EIS relief to the previous tax year?
Yes. You can carry back up to £1 million of EIS investment to the prior tax year, useful if you had a large tax bill in that year. This is known as EIS carry-back.
What is the difference between EIS and SEIS?
SEIS (Seed EIS) targets very early-stage companies and offers 50% relief (up from 45%) on investments up to £200,000 per year. EIS is for slightly more established companies and offers 30% on larger amounts.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.