VCM14090 - Venture Capital Schemes Manual: the Enterprise Investment Scheme: income tax relief: company and investor procedures: company procedures: HMRC authorising the issue of compliance certificates EIS3

When the VCR Team have completed their review and agree that the company has met the conditions of the scheme, they will provide authorisation by issuing a form EIS2, which will contain a Unique Investment Reference (UIR) number for the particular share issue, to the company. This authorises the company to issue a specific number of compliance certificates, forms EIS3, only to those subscribers registered in the compliance statement. In those cases where a subscriber is known to be acting as nominee for more than one investor and HMRC have been provided with their additional details, authority for the issue of the appropriate number of certificates will be provided (except where the nominee is acting for participants in an approved investment fund - see VCM16050).

The company should enter the details of the investment on the EIS3, including the UIR, and issue the completed form to each subscriber. The company will be provided with an EIS3 in Pdf and this may be completed and issued in electronic format, there is no requirement to print these forms.

It’s important to note that forms EIS3 or EIS5 are not made available to anyone other than a company that has been authorised to issue them.

Receipt of a form EIS3 or EIS5 by an investor indicates only that HMRC is satisfied that, from the date of issue of the relevant shares to the date the company submitted its compliance statement, the issuing company has met all the requirements insofar as they could for the time being be met. It does not indicate that the investor will be eligible for tax relief because investors have to meet the investors conditions see VCM14150+.

Joint subscriptions - ITA07/S250(2)

Where shares are subscribed for jointly, each of the owners is to be treated as having subscribed for all of those shares. The amount subscribed by each owner however is taken to be the total amount of the joint subscription divided by the number of joint subscribers. This is the case even if all of the funds were provided by one of the them.

The company should provide each subscriber form EIS3 showing the total number of shares subscribed for on Page 1 of the form EIS3.

Form EIS3 Page 3 should show the amount on which each owner is entitled to claim the tax relief for the shares, that is the fractional amount of the total subscribed calculated as follows:

So, when the company is completing the form EIS3 the spouses or civil partners jointly subscribe £5000 for 5000 shares, Page 1 of form EIS3 will show the 5000 shares subscribed for but the amount to be entered in the Investor details on Page 3 of the form EIS3 should show the name of each subscriber having subscribed £2500 for these 5000 shares.