INCOME TAX RELIEF (in detail)

Income tax relief is available to individuals (counting husbands and wives separately) in respect of the amount subscribed for eligible shares in a qualifying company at 20%, on a maximum of £500,000 for any one tax year. Where investments are made through an approved fund and 90% of the individual's investment has been subscribed for eligible shares issued within twelve months after the closing the fund, the relief is available in the year in which the fund closes. This relief is usually either passed to the Investor in the form of a tax rebate or via an adjustment in PAYE code.

Example:

If the date of subscription in an EIS Company is between 6 April and 5 October in any tax year (or an investment is made in an approved EIS fund which closes between these dates) the Investor has the right, in respect of any separate investment, to carry back the relief and apply it to the previous year for up to half of the amount subscribed (subject to a maximum of £50,000 for all such claims).

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