Re-investment relief, also known as deferral relief, is one of the tax reliefs available under the enterprise investment scheme (EIS). If an individual sells an asset and reinvests the sale proceeds in subscribing for qualifying EIS shares, he can defer the capital gains tax liability on the asset by claiming EIS re-investment relief.
The conditions to be met for deferral relief are less strict than for income tax relief; many investors will qualify for deferral relief without qualifying for income tax relief.
There is no minimum amount of investment required to qualify for EIS deferral relief and the maximum is only limited by the overall risk finance investments annual permitted maximum. The cap is £5m per annum total relevant investments in the issuing company (ie investments under EIS, seed enterprise investment scheme (SEIS), venture capital trusts (VCTs), and investments in social enterprises). Note that the other investment caps in ITA 2007, ss 173AA, 173AB that apply for income tax relief purposes from 18 November 2015 onwards do no apply for EIS deferral relief. TCGA 1992, Sch 5B, para 1(2)(da)