Enterprise Incentive Scheme ('EIS')

The tax benefit realised on investment can be up to 60% of the amount invested by combining income tax relief and CGT deferral.

• 20% income tax relief in the year of investment (max investment £150,000 pa in 2002/3).
• Potential carry back of income tax relief to the tax year before investment.
• Any loss on disposal of shares can be offset against capital gains or taxable income.
• Exemption from capital gains tax on EIS share disposals.
• Deferral of capital gains tax due on gains realised up to three years before the EIS investment is made.
• 100% inheritance tax relief (provided shares are held for at least two years)
• To qualify for full tax benefits the shares must be held for at least 3 years.

• The EIS is a tax incentive to encourage investment in new ventures and small companies
• The investment is a subscription in ordinary shares of a Qualifying Company.
• Qualifying companies are unquoted UK trading companies and must have gross assets of no more than £15m immediately before the relevant subscription or no more than £16m immediately after.

• EIS investments are at the higher end of the risk scale.
• Investments are unquoted so you may have difficulty selling your EIS investments.
• Careful consideration is necessary to ensure that EIS is suitable for you in the light of your personal circumstances and the financial resources available to you.
• You should not subscribe for EIS shares until (a) you have read and understood the share prospectus; and (b) you are aware of the risks involved in EIS shares.