EIS: disposal relief: TCGA92/S150B(2): example
In this example TCGA92/S150A(2) applies but TCGA92/S150A(3) does not.
- July 2008 investor subscribes £500,000 for 100,000 shares in an EIS company. Maximum Income Tax relief of £100,000 is given in the tax year 2009-09.
- August 2010 the investor receives value from the company and as a consequence the Income Tax relief is reduced by £20,000 by making an assessment.
- January 2013 all the shares are sold for £650,000.
The chargeable gain is calculated as below.
The exemption is reduced by the following amount:
|Chargeable gain||X||Reduction in relief|
|Relief attributable to shares before the reduction|
£120,000 of the gain is exempt and £30,000 is chargeable.