A scheme giving 30% income tax relief for investing in qualifying early-stage UK companies.

Can I carry back EIS relief?

Yes, you can carry back relief to the previous tax year, up to your investment in that year.

What happens if the company fails?

You can claim loss relief at your marginal rate on the net loss (after EIS relief).

How long must I hold EIS shares?

3 years to keep the income tax relief and qualify for CGT exemption.

What companies qualify for EIS?

Small UK trading companies with fewer than 250 employees and gross assets under £15 million.

General2026/27

What is EIS? UK Definition 2026/27

Written by Waqas Sagar ACA, FCCA, FMAAT

•

Verified by ICAEW, ACCA & AAT

•Updated April 2026

Quick Answer

Enterprise Investment Scheme - 30% income tax relief for investing in qualifying companies.

Definition of EIS

The Enterprise Investment Scheme offers 30% income tax relief on investments up to £1 million per year in qualifying early-stage companies. Additional benefits include CGT exemption on gains if held 3+ years, CGT deferral by reinvesting other gains, and loss relief. The scheme encourages investment in higher-risk growing businesses.

EIS — Key Facts for 2026/27

Income tax relief	30%
Annual limit	£1 million
CGT exemption	After 3 years
Loss relief	Available

How EIS Works — Example

EIS investment benefits

1Investment in EIS company: £50,000
2Income tax relief (30%): £15,000
3Effective cost: £35,000
4If company grows to £100,000 after 3 years: No CGT
5If company fails: Loss relief available

How EIS Affects Your Tax

EIS offers generous tax reliefs but investments are high risk. Many EIS companies fail. The tax benefits partially offset the risk but should not be the primary reason for investing. Due diligence is essential.

Official HMRC Guidance on EIS

For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.

HMRC: EIS tax relief

Frequently Asked Questions about EIS

Related Tax Terms

SEIS

Seed Enterprise Investment Scheme - 50% income tax relief for investing in start-ups.

Capital Gains Tax

Tax on profit when you sell or dispose of an asset that has increased in value.

Accuracy Note

This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.