You will normally claim EIS tax relief when you complete your tax return. You will be asked some information which is included in your EIS3 certificates. These are certificates you receive from each of the companies you invested in, typically a few months after the investment.

When can EIS loss relief be claimed?

You must make the claim within one year of the 31st January following the end of the tax year in which the loss occurred. For example, for a loss which occurred in the 2019/2020 tax year you would need to make your claim by 31st January 2022.

Who qualifies for EIS relief?

To qualify for this relief, income tax relief must have already been claimed – and not withdrawn by HMRC. Also, investors have to hold the shares for at least three years, and the company must remain EIS-qualifying for at least three years.

How do I claim back EIS relief?

Income Tax Relief

It is possible to 'carry back' all or part of the investment to the preceding tax year as long as the limit for relief is not exceeded for that year. An individual may carry back current year EIS investments to the previous year, provided that the limit in the previous year is not exceeded.

Can a company claim EIS relief?

Companies are able to invest into EIS eligible companies, but the reliefs are only available to individuals. This means that anyone wishing to claim the tax reliefs offered through EIS opportunities must invest as an individual investor rather than through a company.

EIS Tax Relief - Get the Details Right

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How does EIS tax relief work?

The benefits of EIS tax relief

You can claim up to 30% income tax relief on investments up to £1 million per tax year. Any gain is Capital Gains Tax (CGT) free if the shares are held for at least three years. Payment of CGT can be deferred when the gain is invested in shares of an EIS qualifying company.

How do I claim EIS and SEIS tax relief?

Step by Step guide on how to claim SEIS tax relief

1. Make sure the company qualifies for SEIS. ...
2. Obtain Advance Assurance. ...
3. Transfer of shares for funding. ...
4. Investor claims tax relief via SEIS1 form. ...
5. SCEC to approve SEIS1 form. ...
6. Investor to receive tax relief.

What is EIS eligible?

You can receive investment under EIS as long as it's within 7 years of your company's first commercial sale. If you have any subsidiaries (including former subsidiaries) or businesses you've acquired, the date of your first commercial sale is the earliest of the group.

Can a non UK resident claim EIS relief?

In respect of the investors – only UK tax resident investors are eligible to claim EIS or SEIS income tax relief. If your non-UK investors do not suffer any UK income tax, then no relief is available.

Can you backdate EIS relief?

While that's true - they can only file their SEIS/EIS claim in the tax year in which their shares were granted - the good news is that HMRC allow you to backdate the claim to the previous tax year.

When can you sell EIS?

When you invest in an EIS fund, instead, you acquire shares in the underlying companies. As those are not typically listed, you cannot usually sell your shares on the stock market. You can only realise your investment when there is an exit, i.e. the company is sold, listed on a stock market or refinanced.

What is the capital gain tax for 2020?

For example, in 2020, individual filers won't pay any capital gains tax if their total taxable income is $40,000 or below. However, they'll pay 15 percent on capital gains if their income is $40,001 to $441,450. Above that income level, the rate jumps to 20 percent.

Do EIS pay dividends?

EIS offers the potential for a larger, but longer-term return on investment, but will not pay regular dividends. It's high investment allowance means that it can be a useful facility for retirement planning, particularly when compared to the UK's meagre pension allowance.

Can you transfer EIS shares to my spouse?

In response to Eisy, the broad answer is that, yes, it is possible to transfer some (or indeed all) of the enterprise investment scheme (EIS) shares to the spouse without bringing the original gain back into charge.

What happens if you sell EIS shares within 3 years?

If you sell EIS shares within 3 years of the date they were issued (and the sale is not to your spouse or civil partner): Income Tax relief for those you sell will be wholly or partly withdrawn. it will be chargeable to Capital Gains Tax, if you make a gain on the disposal.

How do you qualify for EIS investment?

It must be permanently established in the UK. There have to be fewer than 250 employees (500 for a KIC). Gross assets mustn't exceed £15 million before investment and £16 million after investment. Any funds have to be used within 24 months.

What is EIS funding?

'EIS' stands for Enterprise Investment Scheme, an HMRC-run scheme that helps younger, higher-risk businesses raise finance by offering investors generous tax reliefs. EIS funds offer a simple way of building investors a portfolio of early-stage businesses, or startups.

What is EIS income tax relief?

What is EIS? The Enterprise Investment Scheme (EIS) is a UK government scheme that helps younger, higher-risk businesses raise finance by offering generous tax reliefs to investors. The scheme has been around since 1994, so is a well-established part of the UK tax landscape for investors.

How do I claim tax on shares?

"There's no capital gains tax rate in Australia. It just gets added to your other income, and you pay tax at your normal rate," Mr Rogers says. If you sell shares for less than you paid, you can claim a capital loss. This can be used to offset any capital gains – but not other income like your salary.

Do you pay CGT on EIS shares?

You normally pay no CGT when realising EIS shares, if you have claimed income tax relief on them and the companies still qualify.

When can you claim SEIS relief?

If you're issued SEIS shares in tax year 2020 to 2021, you may claim SEIS Income Tax relief as if all or part had been issued instead in tax year 2019 to 2020. You can claim reinvestment relief for the shares that are treated as issued in tax year 2019 to 2020.

What happens when you sell EIS shares?

If you sell EIS shares within 3 years of the date they were issued (and the sale is not to your spouse or civil partner): Income Tax relief for those you sell will be wholly or partly withdrawn. any gain on the disposal will be chargeable to CGT.

What is the maximum EIS investment on which CGT may be deferred?

Gains that can be deferred are those made on the disposal (not deemed disposal) of a chargeable asset not more than three years before, nor more than one year after, the EIS investment is made. The maximum gain that can be deferred is not limited to the £1m applicable to EIS income tax relief.

Is EIS higher risk than VCT?

VCTs are arguably less risky because the impact of one company failing has less of an effect on their overall returns. But if a holding does well it also contributes less than would be the case with a smaller number of investments. So EISs have the potential for both bigger losses and gains.

How long do I need to hold EIS shares?

EIS investments need to be held for 3 years for the tax reliefs to be retained.