relief , no maximum amount applies to the investment and the investor can be connected with the issuing company
4 . Withdrawal of EIS income tax relief EIS income tax relief is withdrawn or reduced if , before the three-year termination date , the investor disposes of the shares ( otherwise than on death ) or a call or put option is granted over them . EIS income tax relief is also withdrawn or reduced if within the period beginning 12 months before the issue of the shares and ending immediately before the three-year termination date :
�
�
� the investor or an associate of the investor receives any value ( other than an insignificant amount ) from the issuing company or from a person connected with the issuing company ; or
the issuing company or any subsidiary of the issuing company makes a payment to any shareholder which does not give rise to the withdrawal or reduction of EIS or SEIS income tax relief or CGT deferral relief and the payment is made in connection with the repayment , redemption , repurchase , cancellation or extinguishment of shares held by that investor ; or
the issuing company or any subsidiary of the issuing company acquires a trade or trading assets , or shares in a company , which was or were controlled ( either alone or with others ) by the investor . General requirements The amount that qualifies , in aggregate , for EIS income tax relief , relief under the SEIS and relief under the Venture Capital Trust scheme in respect of investments made in a company and its subsidiaries in any year , by all eligible shareholders taken together , is limited to £ 5 million
5 . General requirements The amount that qualifies , in aggregate , for EIS income tax relief , relief under the SEIS and relief under the Venture Capital Trust scheme in respect of investments made in a company and its subsidiaries in any year , by all eligible shareholders taken together , is limited to £ 5 million .
The shares have to be issued to raise money for a qualifying business activity so as to promote “ business growth and development ”. A qualifying business activity is a qualifying trade ( see below ), or research and development which it is intended will benefit or lead to a qualifying trade , carried on by the issuing company or by a 90 % subsidiary of the issuing company wholly or mainly in the UK . The qualifying activity for which the funds are raised has to be carried on for a period of at least four months ending at or after the time of the issue , but the period can be shorter if the company carrying on the activity is wound up or dissolved for genuine commercial reasons .
The money raised has to be wholly employed for the purposes of the qualifying activity ( subject to an amount which is not significant which may be employed for another purpose ) within the period of two years beginning with the issue of the shares or , if later , the commencement of the qualifying activity . Employing funds in acquiring shares in a company , a trade , or intangible assets of a trade does not amount to employing it for a qualifying activity .
There can be no pre-arranged exit and the shares have to be issued for genuine commercial reasons and not as part of an arrangement to avoid tax or of certain other artificial arrangements . Companies qualifying for EIS The principal conditions relating to an EIS company are as follows :
1 . the company issuing the shares must be unquoted ;