The Enterprise Investment Scheme (EIS) encourages investment by individuals in small unquoted trading companies by offering generous tax reliefs to such investors.
The tax benefits are attractive, but considerable care is needed to obtain them and a range of conditions must be fulfilled by both the company issuing the shares and the individual investor. While EIS relief is appealing, the devil is in the detail. For investments in new and very small companies, investors may wish to consider the Seed Enterprise Investment Scheme being introduced in the Finance Bill 2012.
This briefing from Mills & Reeve covers the different types of tax relief available; the conditions of EIS relief and EIS withdrawal.