1.6 Investment through EIS Funds

You can also invest through an EIS Fund, which will invest on your behalf in a number of qualifying companies. You are still the owner of the shares, and the process for claiming relief is as set out above.

Some Funds, set up in a particular way, are approved by HMRC. If you invest through one of these funds, then providing certain conditions are met, there is no minimum investment per company requirement, and you can claim income tax relief as if the shares were subscribed for on the date the Fund closed, rather than the date when they were actually purchased. (Capital gains deferral relief is still claimed by reference to the date the investment in the EIS qualifying company was made.) In these cases, instead of you receiving an EIS3 for each investment, the managers of approved Funds will send you a form EIS5 covering all the investments made on your behalf.

Please note that 'approval' by HMRC is relevant only to the tax treatment of the investments. It in no way bears on the commercial viability of the investments, and you are as liable to have relief reduced or withdrawn on any particular investment in the same way as anyone who invests directly into the company.