EIS: disposal relief: losses: example
- June 2008 an investor subscribes £100,000 for 50,000 shares in an EIS company. Income Tax relief of £20,000 is given in 2008-09, as the EIS rate is 20%.
- January 2013 the investor sells all 50,000 shares for £60,000. Income Tax relief of £12,000 on the £60,000 is withdrawn (£60,000 x 20%, the EIS original rate). Income Tax relief of £8,000 is not withdrawn and remains attributable to the shares sold. The allowable loss is calculated as below.
|Disposal proceeds||£ 60,000|
|Reduced by Income Tax relief*||£ 8,000||£ 92,000|
*This is the EIS Income Tax relief not withdrawn which remains attributable to the shares sold.