Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Venture Capital Schemes Manual

From
HM Revenue & Customs
Updated
, see all updates

EIS: disposal relief: example

  • July 2010 an investor subscribes £750,000 for 100,000 shares in an EIS company.
  • Maximum Income Tax relief of £100,000 is given in the tax year 2010-11.
  • January 2014 all the shares are sold for £1,350,000.

The chargeable gain is calculated as below.

Disposal proceeds £1,350,000
   
Less cost £ 750,000
Chargeable gain £ 600,000

The TCGA92/S150A(3) formula is:

A = Amount of tax relief = £100,000
         
B   Subscription x EIS rate (20% 2010-11)   £150,000

The chargeable gain exemption is restricted to:

£600,000 x 2 / 3 = £400,000

The chargeable gain becomes £600,000 - £400,000 = £200,000.