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HMRC internal manual

Venture Capital Schemes Manual

EIS: income tax relief: general requirements: minimum period requirement


Where money is raised by an issue of shares and that money is to be used for the purpose of qualifying business activity (see VCM12110) the trade concerned (or research and development) must have been carried on for a period of at least 4 months ending at or after the time of the issue of shares.

This means that there must have been four months of actual activity; a company that entered into a few purchase and sale agreements shortly after issuing its shares and then did nothing for four months would not have traded for four months.

There are exceptions for the winding up, dissolution, administration or receivership of a group company in certain circumstances.