Income Tax Act 2007 section 175A

The permitted maximum age requirement

Section 175A sets out the maximum age a company can be and still receive investment under the Enterprise Investment Scheme, targeting EIS relief towards earlier-stage companies that need tax-advantaged funding rounds before attracting mainstream investment.

• If shares are issued after the "initial investing period" (7 years from first commercial sale, or 10 years for knowledge-intensive companies), one of three conditions (A, B or C) must be met for the investment to qualify.
• Condition A requires that a relevant investment was made in the company before the initial investing period ended and that the money was used for the qualifying business activity.
• Condition B requires that investments made in the company over any 30 consecutive days including the issue date total at least 50% of the company's average annual turnover, and the money is used to enter a new product or geographical market.
• Condition C is met where condition B was previously satisfied for earlier investments in the company and the money raised by those earlier investments was used for the qualifying business activity.