Autumn Budget: EIS limits to double for certain investments

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Chancellor Philip Hammond has announced that EIS investment limits will be doubled for certain companies in today’s Autumn Budget, while also ensuring the scheme is not used as a shelter for risk-free assets.

The current maximum investment limit eligible for tax relief is £1m.

Hammond says the new limit will apply for “knowledge-intensive” companies. There had been concerns prior to the budget that tax advantages for EIS would be reduced.

There was no mention of changes to VCTs in the Chancellor’s budget speech.

Companies qualify for the EIS scheme if they’ve been trading for at least four months and have no more than £15m in gross assets and fewer than 250 employees or 500 employees in certain conditions.

It is one of four schemes designed to help small or medium sized companies and social enterprises grow by attracting investment, with the SEIS available for smaller companies with less than £200,000 gross assets and fewer than 25 employees.

VCTs, another scheme, have also come under fire in today’s budget. Social Investment Tax Relief (SITR) is the remaining venture capital scheme, which applies to charities and SMEs with a social or community benefit.

Currently EIS investments get 30 per cent income tax relief and are capital gains free if held for at least three years.

An estimated £15.9bn has been invested in the schemes since the EIS was launched in 1994.