FS Ventures has built excellent relationships with many leading Venture Capital providers, Business Angels and Networks, providing us with access to investments for some of the brightest early stage businesses, occasionally on an exclusive basis.

The Enterprise Investment Scheme (EIS) is a government initiative designed to attract investment into small UK companies. 

The EIS offered are tax-efficient investments. Our partners ensure the EIS qualifying status with HMRC for each investee company before we invest. Our investment decisions are influenced by each companies commercial merits and are not based just on the considerable tax benefits that EIS offer.

EIS investments provide enterprise capital to small unlisted companies that might otherwise struggle to attract funding. The government recognises the important role smaller businesses play in a successful economy and offers tax benefits to EIS investors in order to ensure funding is available. 

Since their introduction in 1994, EIS investments have grown in popularity with subsequent increases in allowable subscription levels ensuring investment volumes continue to rise year on year. According to figures provided by HM Revenue & Customs (HMRC), since the Enterprise Investment Scheme (EIS) was launched in 1994, 32,965 companies have received investment and around £24 billion of funds have been raised. In 2019 to 2020, 4,215 companies raised a total of £1,905 million of funds under the EIS scheme. Funding has increased from 2018 to 2019, when 4,060 companies raised £1,867 million.

* Source: November 2021.


EIS Tax Incentives

Investors may become eligible for certain tax benefits available through the EIS depending on the length of time the underlying investments are held for:

  • 30% upfront income tax relief 
    EIS investors may claim up to 30% Income Tax relief, provided the qualifying investment is held for at least three years.  Investors can claim up to £300,000 for the current tax year (30% of up to a maximum investment of £1,000,000 per tax year) or up to £300,000 against their Income Tax liability for the previous year, as long as the amount of tax relief claimed is not more than the Income Tax paid.
  • Tax-free growth
    If an EIS investment increases in value, there is no Capital Gains Tax (CGT) to be paid.
  • 100% inheritance tax relief after two years
    As EIS shares are eligible for Business Relief (BR), so there is no Inheritance Tax payable if held by the investor for at least two years and they are still held at the time of death.
  • 100% capital gains tax deferral
    Any taxable capital gain (from thirty six months before an EIS investment or twelve months after) can be invested in an EIS qualifying company and the CGT will be deferred for the duration that investment is held.  If the investment is still held when the investor dies the deferred tax is eliminated.
  • Loss relief
    Although it is hoped that shares in the underlying investee companies within an EIS do not fall in value (FS Ventures EISs are designed to generate growth, rather than to maximise loss relief), investments can go down as well as up and investors may not get back the full amount invested.  Losses from individual EIS investments can be mitigated as loss relief is available on each individual holding. So, investors can claim loss relief if shares in one company fall in value, even if the other shares in the investor’s EIS portfolio increase in value.  Investors can set loss relief against CGT or Income Tax, depending which is the most beneficial for their personal circumstances.


There are a number of risks involved with any investment. Specific EIS risks include:

  • Your money is at risk
    As with any investment, the value of shares can go down as well as up and investors may not get back the full amount invested.  Investors should be aware that investment in smaller unlisted companies (including (S)EIS qualifying companies) carries with it a high degree of inherent risk whether or not it is done via a diversified portfolio, regardless of any tax advantages which such an investment might carry and/or regardless of any steps taken to attempt to mitigate that risk. Investment in a (S)EIS should therefore be considered a high risk investment.
  • Long-term investment
    (S)EIS shares are typically held in unlisted companies, from which investors might only be able to exit via a refinance or company sale. (S)EIS shares must be held for at least three years in order to qualify for Income Tax relief.  If shares are sold prior to being held for three years, any claimed Income Tax relief will have to be repaid. (S)EIS investments should therefore be considered as a medium to long term investment and investors are unlikely to have access to their capital during the investment period.
  • Tax Rules may change
    (S)EIS tax reliefs are specific to an individual’s circumstances. Tax rules may change and companies may not always be (S)EIS-qualifying. If a qualifying company fails to meet the requirements of (S)EIS legislation, tax reliefs may be withdrawn and investors may have to repay rebated tax. HMRC may change the rules on (S)EIS tax relief at any point.
  • You may affect your investment
    It is important to remember that tax benefits can be lost due to your own actions. For example, you would have to repay Income Tax relief if you were or became connected with an investee company (for example as a director or shareholder owning 30% or more of the company).

Important Information

The content of this webpage should not be construed as financial advice. FS Ventures is a non-advised only service.

The benefit of tax relief depends on the individual circumstances of each investor and is assessed at the point a claim for relief is made.

Tax rules could change in the future and the availability of tax relief is not guaranteed.

Non-advised investments may include possible conflicts of interest. Including where FS Ventures and/or Finance Shop or its employees are invested in selected funds and companies, potentially with significant shareholdings.

Any decision to invest should be made only based on the relevant documentation for each investment. Past performance is not necessarily a guide to future performance. The value of an investment may go down as well as up and investors may not get back the full amount invested.

Investments in small unquoted companies carry a high level of risk. These investments are highly illiquid and as such, there may not be a readily available market to sell such an investment. FS Ventures is targeted at sophisticated investors who understand the risk of investing in early-stage companies and can make their own investment decisions.

The investment opportunities offered on this platform are not covered by the Financial Services Compensation Scheme.