Income Tax Act 2007 section 175

The use of the money raised requirement

Section 175 sets out the rules governing how and when the money raised through an EIS share issue must be employed for its intended qualifying business activity.

• All money raised by the share issue (excluding bonus shares) must be used wholly for the qualifying business activity it was raised for, within the specified deadline
• Using the money to acquire subsidiary interests, trades, intangible assets or goodwill does not count as employing it for a qualifying business activity
• The deadline is generally two years from the date the shares were issued, or two years from when the qualifying trade began if that is later
• The requirement is not breached merely because an insignificant amount of the money raised is used for a different purpose