What is the maximum investment amount that qualifies for income tax relief in Enterprise Investment Schemes (EIS)?

In an Enterprise Investment Scheme (EIS), the maximum investment amount that qualifies for income tax relief is indeed £1 million. This investment threshold is significant because it allows investors to access tax relief on their contributions to qualifying companies, thereby encouraging investment in small, high-risk businesses which can drive innovation and economic growth.

Investors typically receive 30% income tax relief on the amount invested, which effectively reduces their overall financial commitment. The £1 million limit not only incentivizes higher investment but is also designed to resonate with investors seeking to utilize EIS as part of their tax planning strategies.

While investors can contribute over this amount, only the first £1 million invested in qualifying EIS shares will qualify for the mentioned tax relief. Understanding this context is crucial for financial advisers and clients alike when making investment decisions within the EIS framework.