Venture capital scheme shares

Produced by a Tolley Personal Tax expert

Personal Tax

Guidance

Venture capital schemes are tax efficient investments sanctioned by the Government in order to encourage investment in UK enterprises. They comprise the following schemes:

•
enterprise investment scheme (EIS)
•
seed enterprise investment scheme (SEIS)
•
venture capital trusts (VCT)
•
social investment relief (SI relief, also known as social investment tax relief (SITR))

The tax reliefs are similar but not identical. Some investors consider VCTs to be more attractive as the risks are spread by indirectly investing in a number of unquoted companies rather than investing direct in one company, as with EIS and SEIS investments.

This guidance note considers the capital gains tax position of individuals disposing of shares acquired through the schemes listed above.

Enterprise investment scheme

EIS is the name of a scheme which encourages individuals to invest money in shares issued by qualifying unquoted trading companies with a permanent establishment in the UK.

A subscription for eligible shares in a qualifying EIS company is a tax efficient investment for the individual. The individual can benefit from the following tax reliefs:

•
income

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