Calculate income tax relief, CGT deferral, and loss relief from investing in Enterprise Investment Scheme qualifying companies.
This calculator provides estimates for guidance only. EIS tax reliefs are subject to HMRC rules and conditions including minimum holding periods. Always consult a qualified financial adviser before investing in EIS-qualifying companies.
The Enterprise Investment Scheme (EIS) is a UK government initiative designed to help smaller, higher-risk companies raise finance by offering tax reliefs to investors who purchase new shares in those companies. Established in 1994, EIS has become one of the most popular tax-efficient investment schemes in the UK, supporting thousands of growing businesses while providing investors with significant tax advantages. For the 2026-27 tax year, EIS offers three key benefits: 30% income tax relief on investments up to GBP 1 million (or GBP 2 million for knowledge-intensive companies), the ability to defer capital gains tax on gains reinvested into EIS shares, and loss relief if the company fails. These reliefs can dramatically reduce the effective risk of investing in early-stage companies. This calculator helps you estimate the total tax reliefs available from an EIS investment, including income tax relief, CGT deferral, and loss relief in a worst-case scenario. Understanding the full picture of EIS reliefs is essential for assessing the true risk-adjusted return of investing in qualifying companies.
To calculate your EIS tax reliefs: 1. Enter your investment amount. This is the total you plan to invest in EIS-qualifying shares. The annual limit for income tax relief is GBP 1 million, or GBP 2 million if investing in knowledge-intensive companies (those spending at least 20% of costs on R&D or innovation). 2. Select your tax band. This determines the value of loss relief if the company fails, as losses are offset against income at your marginal rate. Higher rate taxpayers get more valuable loss relief. 3. Choose whether you are deferring a capital gain. If you have realised a capital gain and are reinvesting the proceeds into EIS shares, you can defer the CGT on that gain. Select yes and enter the gain amount. 4. Select the company fails option to see loss relief. This shows the worst-case scenario where the company loses all value. Loss relief offsets your loss (investment minus income tax relief) against income at your marginal rate. 5. Review the results. The calculator shows each relief separately, the combined effective cost after all reliefs, and the effective risk reduction as a percentage of your original investment.
EIS reliefs are calculated in three layers: Income Tax Relief: 30% of the qualifying investment. For GBP 100,000 invested, you receive GBP 30,000 income tax relief. This is claimed on your Self Assessment tax return and reduces your income tax liability for the year of investment or the previous year (carry-back). CGT Deferral: If you reinvest a capital gain into EIS shares, the CGT on that gain is deferred until you dispose of the EIS shares. For a GBP 50,000 gain at the higher rate (20%), the deferred tax is GBP 10,000. The gain is not eliminated, only postponed. Loss Relief: If the company fails, your allowable loss is the investment minus income tax relief received. For a GBP 100,000 investment with GBP 30,000 relief, the loss is GBP 70,000. At 40% marginal rate, loss relief is GBP 28,000. Combining all three for a higher rate taxpayer investing GBP 100,000 with a GBP 50,000 gain to defer and company failure: GBP 30,000 + GBP 10,000 + GBP 28,000 = GBP 68,000 in reliefs. The effective cost of losing the entire investment is only GBP 32,000 -- a 68% risk reduction.
EIS investments carry significant risks alongside the tax reliefs. The qualifying companies are typically small, unquoted businesses in their early growth stages. There is a real possibility of losing your entire investment, which is why the government offers such generous tax reliefs to incentivise this type of investment. The minimum holding period is 3 years. If you dispose of your EIS shares within 3 years, the 30% income tax relief is clawed back in full. The company must also continue to meet qualifying conditions throughout the 3-year period. EIS qualifying conditions require the company to have fewer than 250 employees, gross assets under GBP 15 million before the investment and GBP 16 million after, and be less than 7 years old (or 10 years for knowledge-intensive companies). The company must carry on a qualifying trade, excluding property development, financial services, legal services, and several other sectors. Carry-back relief allows you to claim income tax relief against the previous tax year instead of or as well as the current year, subject to the annual limit for each year. This can be useful if you had a higher tax liability in the previous year. The CGT deferral has no time limit and no cap on the amount deferred. The deferred gain becomes chargeable when you dispose of the EIS shares, but if you still qualify for EIS reliefs at that point, you could potentially reinvest and defer again. If you die holding the shares, the deferred gain is written off entirely. EIS compliance certificates (EIS3 forms) are issued by HMRC to the company, which then provides them to investors. You cannot claim income tax relief until you have received your EIS3, which can take several months after investment. Claims must be made within 5 years of the 31 January following the tax year of investment. EIS is regulated by HMRC under the Income Tax Act 2007 (Part 5). Advance assurance can be sought from HMRC before investment to confirm the company and shares qualify, though this is not mandatory.