EIS: income tax relief: the investor: overview
Chapter 2 of Part 5 deals with the requirements relating to the investor. There are three main requirements:
- The investor must have no ‘connection’ with the issuing company (see VCM11020),
- The investor or any associate must not have received a loan which would not have been made, or would not have been made on the same terms, were it not for the EIS investment (see VCM11030), and
- The investor must have subscribed for the shares for genuine commercial reasons and not as a part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax (see VCM11040).
See VCM11100 for the meaning of ‘associate’.