UUÂãÁÄÖ±²¥

The enterprise investment scheme (EIS) encourages individuals to invest money in shares issued by qualifying unquoted companies.

A subscription for eligible shares of a qualifying EIS company is a tax efficient investment for the individual. For a summary of the tax reliefs that are available to the investor, see the Enterprise investment scheme tax relief guidance note.

Any profit on the disposal of the EIS shares themselves is likely to be exempt from capital gains tax under the rules discussed in the Enterprise investment scheme tax relief guidance note.

CGT deferral relief allows investors disposing of any asset to defer gains against subscriptions in EIS shares. This is discussed in detail in the Enterprise investment scheme deferral relief guidance note.

Under EIS deferral relief (also known as EIS re-investment relief), deferred gains are set aside or ‘frozen’ until the occurrence of specified future events. The base cost of the replacement asset (ie the new EIS shares) remains unchanged.

This frozen gain crystallises and becomes chargeable in the year of a ‘chargeable event’. Usually,