The UK Government offers two very attractive schemes, which encourage the UK based investors to make an investment in the companies based in the UK , called Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS).
Investors will receive Income Tax relief on the amount of they have invested, subject to certain limits, and will pay no tax (Capital Gains) on the sale of the shares after 3 years. The amounts and limits are different for EIS and SEIS and may change over time. It is essential to take expert advice before considering using these tax advantages.
In considering the implications of seeking EIS funding you should keep in mind that EIS qualifying companies have to satisfy a number of requirements at the time of the share issue and for the following three years.