The case study below demonstrates how EIS can be used for CGT deferral, income tax relief and inheritance planning, particularly when applied as part of a rolling, long-term strategy.
Practical Example
Without EIS investment, a client selling a share portfolio with a £100,000 gain would ordinarily pay up to £24,000. By investing the entirety of the gain in EIS-qualifying companies, this £24,000 CGT liability is deferred, and the client further benefits from £30,000 income tax relief available in the tax year of investment or the previous tax year.
Any gains within the portfolio are available for the client to withdraw free of CGT on exit. By continuing to reinvest the original £100,000, the original CGT liability can continue to be deferred, with an additional £30,000 of income tax relief available on each reinvestment.
If the client dies whilst holding the EIS, the original £24,000 CGT liability falls away, and the investment may be passed to beneficiaries free of IHT.
Parkwalk Advisors Limited (Parkwalk) is authorised and regulated by the Financial Conduct Authority: FRN 502237. Investments referred to in this news article are not suitable for all investors. Capital is at risk and investors may not get back the full amount invested. Any investment in a Parkwalk product must only be made on the basis of the terms of the full Information Memorandum. Tax treatment depends on the individual circumstances of each investor. Parkwalk is not able to provide advice as to the suitability of investing in any product. Past performance is not a reliable indicator of future results. This financial promotion was approved in June 2025.
