An EIS is a UK investment scheme that supports early-stage companies by offering tax reliefs to high-net-worth investors. By investing in EIS funds, investors can enjoy potential capital growth while providing financial support to innovative UK businesses.

You can invest in EIS schemes by:

• Exploring various EIS funds managed by professional fund managers.
• Consulting a financial advisor to understand your eligibility.
• Comparing available funds and selecting one that aligns with your investment goals.

Learn more about EIS funds

EIS funds offer several tax benefits to high-net-worth investors. However, it is important to note that these benefits are subject to specific conditions and holding periods.

1. Income tax relief – You can claim 30% of income tax relief on the investments in EIS funds, provided it is held for at least three years.
2. Capital gains tax exemption – Any profits made from selling EIS shares are tax-free.
3. Capital gains deferral – Investors can defer capital gains tax on profits from selling other assets by reinvesting those gains in EIS funds.
4. Inheritance tax relief – Inheritance tax is exempted if EIS investments are held for at least two years and still held at the time of death.
5. Loss relief – Investing in high-risk, small, unquoted companies carries inherent risk. So if things go unplanned, you can claim loss relief on the investment made.

Remember that these tax reliefs depend on your individual situation and may change, so consulting a financial advisor is a good idea.

Income tax relief can be claimed after shares are allotted and you receive your EIS3 certificate from the company in which you have invested in.

Yes. Selling EIS shares after the minimum holding period may make you eligible for capital gains tax exemption, reducing your CGT liability.

You can carry back EIS tax relief to the previous tax year in certain cases. This may provide you with an opportunity to apply the relief retroactively and optimise your tax situation. However, specific rules and limitations apply, so it’s advisable to consult with a financial advisor for guidance.

To qualify for all the tax reliefs, EIS investments must be held for a minimum of three years. Typically, EIS investments are illiquid in nature and may require a commitment of 3-7 years.

A KI EIS fund invests in Knowledge-Intensive companies – a status given by HMRC. Knowledge-intensive companies highly focus on research & development activities, innovation, intellectual properties. Thus, KI EIS funds invest in companies focused on R&D activities and innovation.

Investing in a KI EIS fund allows you to:

• Support companies driving innovation and R&D.

• Enjoy enhanced tax benefits compared to regular EIS funds.

Investing in Knowledge Intensive EIS funds has several added benefits over regular EIS funds. Common Benefits (shared with regular EIS) Similar benefits in EIS Added Benefits of investing in Knowledge-Intensive (KI) EIS funds. 

1. Higher Investment Limit – You can invest up to £2 million per tax year, which is higher than the £1 million limit for a regular EIS fund.
2. Greater tax predictability – Shares in KI EIS funds are issued on the fund’s closing date rather than deployment which ensures greater tax predictability.
3. Carry-back tax relief – In addition, there is a surety on Carry-back tax relief to the previous year due to the fixed closing date of the funds.
4. Hassle-free Certificate – A single EIS5 Certificate rather than multiple EIS3 certificates in regular EIS funds to claim income tax relief.

Yes. Investing in small, unquoted companies is a high risk. Proper due diligence and a trusted partner can help mitigate your risk. But note that – Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

To invest in a Knowledge Intensive (KI) EIS fund:

• Visit o2hventures.com/funds
• Explore available investment opportunities.
• Contact our team for the guidance and further details.