Following the news that business property relief for inheritance tax will drop in 2026, we at GBI Magazine reached out to experts to find out their thoughts, and whether they see this being an issue for EIS investments.
We start this series off with Marcus Love, Co-Founder and General Partner at Love Ventures. Marcus reveals whether this change will cause his company to change their strategy, and outlines how these changes will affect how attractive EIS investments are for investors.
1.) With BPR IHT relief due to drop from 100% to 50% in 2026, does that change how you view EIS investments? Are you thinking about adjusting your strategy or focus?
Today, the primary motivation for investors exploring EIS opportunities is the potential to invest in the next generation of innovative start-ups while mitigating risk through income and capital gains tax reliefs. While EIS also offers attractive benefits for inheritance tax (IHT) planning through Business Relief, investors who are primarily focused on IHT planning often prefer to use other strategies, such as Business Relief-focused investments (e.g. AIM-listed or unquoted shares), gifts, trusts, and other estate planning tools. Therefore, we see no need to alter our strategy or focus. Our commitment remains steadfast in identifying the most promising technology start-ups and driving their growth from seed to Series A, delivering exceptional opportunities for our investors.
2.) Now that BPR IHT savings are being halved in 2026, do you still see EIS as one of the best tax-efficient options, or does this shift how you think about its overall appeal?
In addition to its broader benefits, EIS remains especially appealing for investors seeking to reduce risk through income and capital gains tax reliefs and particularly, those looking to access the most exciting UK smaller companies, with the benefit of tax free growth! Following the recent Autumn Statement, capital gains tax rates have increased, and business asset disposal relief thresholds are set to rise over the coming years. This creates an opportunity for investors to leverage the Enterprise Investment Scheme to defer taxes associated with such asset sales.
While Business Property Relief is not typically the primary motivation for EIS investors, the new £1 million allowance ensures that most investors utilising this structure can still benefit from IHT exemption on these assets upon death. Since the allowance is per individual, properly structured wills can enable estates to take advantage of a combined £2 million allowance for couples.
3.) Do you think cutting BPR IHT relief to 50% from 2026 will change how attractive EIS is for investors in general?
Not at all. As outlined, IHT exemption is not the primary motivation for investors utilising the Enterprise Investment Scheme (EIS). Instead, the focus is on driving growth and achieving high returns, with the potential for uncapped, tax-free gains. While EIS investments are inherently high-risk due to the nature of early-stage companies, investors can mitigate some of this risk through income tax relief and the ability to defer capital gains.
An often-overlooked benefit of EIS is the ability to claim loss relief if an investment is realised at a lower value than originally invested. In such cases, the loss can be offset against either income tax or capital gains tax, further reducing downside risk. As always, investors should consult with a financial advisor to fully understand the benefits and risks associated with EIS investing.
Marcus spent the early part of his career in Paris, working for nearly 10 years in consulting for Cap Gemini, then in a start-up and various sales roles. In 2005, he moved back to London and worked for 14 years, selling global equity research to fund managers.
He started angel investing in 2015 and built up an angel portfolio of 20 companies. Marcus formed Love Ventures in March 2020 at the start of the pandemic and hasn’t looked back since. He loves helping portfolio companies where he can and is very excited by the growth of their EIS proposition, where they have invested in 30+ early stage, technology focused companies to date.
