Utilising Carry-back through EIS investing

A practical overview of carry‑back through EIS investing, explaining how the relief works, key planning considerations, and how it can be applied to manage income tax liabilities. Illustrative examples are included alongside a webinar recording, offering further insight into how carry‑back can be used in practice.

Warning: EIS investments are high-risk and not suitable for all investors. Tax reliefs depend on individual circumstances and may change. Capital is at risk.

Steven Powell

Sales Director, Deepbridge

Steven joined Deepbridge in 2015 after a previous role with a tax mitigation strategy company as a Relationship Manager. Steven joined as a Business Development Manager, was later promoted to Regional Director in 2019, and is now the Sales Director as of early 2024. Steven’s role is heading up the product distribution team via financial advisers for Deepbridge’s core products in EIS, SEIS and Business Relief.

Steven has a wide range of contacts in the industry and holds various tax-efficient investment-related qualifications as well as a BA (Hons) in Business Management.

Learning outcomes from the Webinar

Webinar date: Wednesday 25 February 2026
Presented by: Steven Powell, Sales Director, Deepbridge

This webinar highlighted the following:

As the end of the tax year approaches, financial advisers and investors are increasingly revisiting the Enterprise Investment Scheme (EIS) as a mechanism for managing income tax and capital gains liabilities. One often overlooked and sometimes misunderstood aspect of EIS investing is the “carry-back” feature of EIS, which allows investments made in the current tax year to be treated as if they occurred in the previous one for income tax purposes.

Investors are often seeking ways to respond to tax liabilities that have already crystallised. For individuals who have recently submitted their self‑assessment returns and settled large income tax bills, carry-back offers a route to reclaim a portion of tax paid, provided certain conditions are met.

Under EIS rules, investors can claim 30% income tax relief on qualifying investments and elect to apply that relief against the previous tax year, subject to available allowances. This option is not available under Venture Capital Trusts (VCTs), a distinction that has become more prominent following recent changes to VCT tax reliefs announced in the Budget.

For carryback to apply, shares must be issued in the current tax year, either through allocation into underlying companies or, in the case of some fund structures, through the formal closing of the fund. Advisers were urged to pay close attention to when capital is actually deployed, as delays can limit the ability to use carry-back effectively.

Two case studies illustrated common scenarios. In one, a high‑earning professional used an EIS investment to reclaim income tax paid earlier in the year. In another, a landlord who had sold a buy‑to‑let property used EIS to defer capital gains tax while also accessing income tax relief and potential inheritance tax advantages.

The session also addressed common misconceptions, including the belief that tax relief is lost if certificates are not issued within a specific timeframe. In practice, investors have several years to claim relief once shares are issued, though cash‑flow implications can vary.

While EIS investments carry higher risk and longer holding periods than mainstream assets, the discussion suggested that carry-back remains a central consideration for advisers supporting clients in a high‑tax environment. As tax year‑end approaches, attention is likely to focus not only on eligibility and allowances, but on whether investments are structured and timed in a way that allows reliefs to be claimed as intended.

IMPORTANT INFORMATION: These videos are for professional advisers, as defined by the Financial Services and Markets Act 2000 (“FSMA”), only. The content of these videos is not intended to constitute investment, tax or legal advice. Tax treatment depends on the individual circumstances of each prospective investor and may be subject to change in future. The availability of tax reliefs depends on the Company invested in maintaining its qualifying status. Investment in unquoted companies carries high risks. It is highly speculative, and your clients or prospective investors should be advised that they could lose the total value of their investment. Past performance is not a reliable indicator of future performance. Prospective investors should not invest if they are likely to require the capital in the near term. Any decision to invest should be made only on the basis of the relevant documentation for each investment. This is not an exhaustive list of EIS, SEIS and IHT tax rules and is intended for information purposes only. No reliance should be placed upon the content. Nothing in the video shall be regarded as constituting tax advice, and it is the responsibility of professional advisers to ensure their own understanding of the relevant tax implications before making or recommending any investment decisions. Figures stated throughout this presentation are approximate.

REGULATORY INFORMATION: Deepbridge Capital LLP is a limited liability partnership registered in England & Wales, Company No. OC356449. Registered Office: Deepbridge House, Honeycomb East, Chester Business Park, Chester CH4 9QN. Deepbridge Capital LLP is authorised and regulated by the Financial Conduct Authority (FRN: 563366).