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Calculus Products Education Hub

This page is intended for UK financial advisers, wealth managers, paraplanners or other members of staff at firms authorised by the Financial Conduct Authority to carry out regulated financial activities.

Introduction to EIS

Here we explain the background to the Enterprise Investment Scheme, which companies would qualify, the EIS tax reliefs available for investors and where EIS managers fit in.

Traditional EIS vs Knowledge Intensive Approved EIS

There are two ways of investing in an EIS Fund – an unapproved, commonly known as a traditional or generalist EIS or an approved EIS

The main difference between approved and unapproved EISs is the timing the investor can claim tax reliefs. With an approved structure an investor can claim full income tax relief in the year the subscription is made (or carry back to the previous year). With an unapproved fund, the dates in which the investments are made into each underlying company are pertinent for tax reliefs. These individual investments may straddle multiple tax years.

To be treated as an approved EIS fund, there are additional conditions from HMRC, including 80% of the funds must be invested in knowledge intensive companies, and 50% of the funds must be invested within 12 months of the fund closing (and a total of 90% within two years).

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