What minimum period must an investor in an Employment and Investment Incentive (EII) scheme retain their investment to avoid an income tax relief claw back?

• A. One year.
• B. Two years.
• C. Three years.
• D. Four years.

Answer: (D)

In the EII scheme, the tax relief you receive up front on your investment is contingent on how long you keep that investment. To avoid any clawback of the relief, you must retain the investment for four years. This four-year minimum holding period ensures the investment supports the company over a meaningful horizon. If you dispose of the shares before four years are up, the relief is clawed back. Therefore, four years is the threshold that preserves the relief, whereas shorter periods would trigger clawback.