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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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EIS: income tax relief: the issuing company: unquoted status requirement

ITA07/S184

At the time when the shares are issued, neither they nor any of the company’s other shares or debentures or other securities may be quoted - that is, listed on an exchange which is at that time a recognised stock exchange (see CTM60310) or has been designated by HMRC, or be dealt in outside the UK by any means designated by HMRC.

In addition, at the time when the shares are issued there must not be any arrangements for such a listing, or for the company to become a subsidiary of another company, which would not satisfy this requirement. It may become quoted later without the investors losing tax relief, but not if there were arrangements for it to become quoted in existence when the shares were issued.

The Alternative Investment Market (AIM) and the PLUS Markets (with the exception of PLUS-listed) are not considered to be recognised exchanges, so a company listed on those markets can raise money under the EIS if it satisfies all the other conditions. The PLUS-listed market is regarded as a recognised stock exchange and shares listed on that market at the time of issue will not qualify for EIS.

Enquiries as to whether an exchange or a means of dealing has been designated should be addressed to CTIAA (CT Structure, Incentives & Reliefs team).