1. The investor must hold shares in the EIS investment scheme for at least 3 years.
2. EIS schemes provide a convenient means of tax relief. Individuals previously unconnected with the company in which they invest may:
a. obtain income tax relief (currently at 20 per cent) in any one tax year on the maximum investment of (currently) £200,000 in any one tax year;
b. defer capital gains tax in conjunction with the income tax relief at 1(a) above in respect of any chargeable gain arising from the disposal of assets after 28 November 1994 on reinvestment to the value of the amount of the gain in the shares of a qualifying EIS company;
c. obtain exemption from capital gains tax on disposal of the shares in the EIS investment if the shares are disposed at least 3 years after their issue; and d. set any losses on an EIS investment against income or gains at the taxpayer's highest rate of tax.
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