Enterprise Investment Scheme (EIS) & ISA’s

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. Individuals are entitled to relief on investments in certain unquoted trading companies through EIS.

Maximum investment per annum: £1,000,000

Income tax relief: 30%

Capital gains treatment on disposal if held for 3 years: Exempt

Capital gains from the disposal of other assets may be deferred by making an EIS investment.

All reliefs are subject to detailed conditions being met.

Seed Enterprise Investment Scheme (SEIS)

The Enterprise Investment Scheme (EIS) provides tax relief for individuals prepared to invest in new and growing companies. Investors can obtain generous income tax and capital gains tax (CGT) breaks for their investment and companies can use the relief to attract additional investment to develop their business. A junior version of EIS known as Seed Enterprise Investment Scheme (SEIS) has been introduced.

Maximum investment per annum: £100,000

Income tax relief: 50%

Capital gains treatment on disposal of SEIS investment held for 3 years: Exempt

An individual who makes a capital gain on another asset and uses the amount of the gain in making a SEIS investment will not pay tax on 50% of the gain subject to certain conditions.

All reliefs are subject to detailed conditions being met.

Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies. VCTs operate by indirect investment through a mediated fund. In effect they are very like the investment trusts that are obtainable on the stock exchange, albeit in a high-risk environment. Individuals are entitled to relief on investments in VCTs.

Maximum investment per annum: £200,000

Income tax relief: 30%

Dividend income: Exempt

Capital gains treatment on disposal: Exempt

All reliefs are subject to detailed conditions being met.

Social Investment Relief (SIR)

Social Investment Relief (SIR) is designed to encourage private individuals to invest in social enterprises including charities. Individuals are entitled to relief on their investment:

Maximum investment per annum: £1,000,000

Income tax relief: 30%

Capital gains treatment on disposal: Exempt

Capital gains from the disposal of other assets may be deferred by making a SIR investment.

All reliefs are subject to detailed conditions being met.

ISA’s

The income from ISA investments is exempt from income tax. Any capital gains made on investments held in a ISA are exempt from capital gains tax.

Investors are not allowed to invest in more than two separate NISA in each tax year, a cash NISA and a stocks and shares NISA.

Savers are able to subscribe any amounts into a cash ISA or a stocks and shares ISA subject to not exceeding the overall annual investment limit.

Investors are to transfer their investments from a stocks and shares ISA to a cash ISA (or vice versa).

2015/16:

Overall annual investment limit: £15,240

2014/15:

Limits 6.4.14 to 30.6.14 (£) 1.7.14 to 5.4.15 (£)
Overall annual investment 11,880 15,000
Cash up to 5,940 max N/A
Balance in stocks and shares 11,880 max N/A