EIS limits and rules: what companies and investors must meet

EIS has two sets of conditions. One applies to you as an investor. The other applies to the company, and it is the one that most often causes relief to be lost, because it can fail after you have invested.

Company limits from 6 April 2026

The increases were legislated in Finance Bill 2025-26 and take effect from 6 April 2026. They do not apply to qualifying companies registered in Northern Ireland trading in goods, or in the generation, transmission, distribution, supply, wholesale trade or cross-border exchange of electricity, which remain on the previous limits.

The other company conditions

• It must be carrying on, or preparing to carry on, a qualifying trade. Several activities are excluded, including most financial and property-backed trades.
• It must not be listed on a recognised stock exchange, and must not be controlled by another company.
• It must have fewer than 250 full-time equivalent employees, or 500 for a knowledge-intensive company.
• The share issue must normally happen within seven years of its first commercial sale, or ten for a knowledge-intensive company.
• The money must be spent on a qualifying business activity, usually within two years.

Investor conditions

• The shares must be new, full-risk ordinary shares, paid for in cash.
• You must hold them for at least three years from the issue date, or from when the trade starts if later.
• You must not be connected with the company: broadly, not an employee or paid director at the time of issue, and not holding more than 30% of the share capital or voting rights.
• There must be no arrangement to protect your capital - the risk has to be real.

The equivalent SEIS thresholds are considerably smaller and are set out in SEIS limits.