Inheritance Tax (IHT) Relief

EIS Qualifying Companies normally are treated as "relevant business property" for the purposes of IHT where the Investment in an Investee Company has been held for two years. In this case an IHT exemption for 100% of the value of the Investment would be obtained in the event of the death of an Investor.

Please note that, even if an Investor dies within the two year period and his or her spouse inherits an Investment, the holding period of both the Investor and the spouse are combined in order to determine whether the two year holding period condition has been satisfied on the death of the spouse.

Example:

	£
Initial Investment (net of charges)	50,000
EIS Relief (at 20%)	(10,000)
Capital Gains Deferral (at 40%)	(20,000)
IHT Relief (at 40%)	(20,000)
Net Cost of Investment	Nil

Please note that a full listing on the London Stock Exchange would lead to a loss of business property relief for IHT purposes.