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HMRC internal manual

Venture Capital Schemes Manual

From
HM Revenue & Customs
Updated
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EIS: income tax relief: general requirements: overview

ITA07/S172

As well as the investor requirements (see VCM11000+) and issuing company requirements (see VCM13000+) there are general requirements relating to the investment and how it is used. Chapter 3 of ITA07/Part 5 sets out the requirements to be met as to:

* the shares (see [VCM12020](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12020)), 
* the maximum amount raised annually (see [VCM12030](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12030)),
* the spending of any previously raised SEIS money (see [VCM12040](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12040))
* the purpose of the issue of shares (see [VCM12050](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12050)),
* the use of the money raised (see [VCM12060](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12060)) (see [VCM12110](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12110) for the meaning of ‘qualifying business activity’),
* the minimum period (see [VCM12070](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12070)),
* no pre-arranged exits (see [VCM12080](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12080)), 
* no tax avoidance (see [VCM12090](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12090)), and
* no disqualifying arrangements (see [VCM12100](https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm12100)).