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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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EIS: deferral relief: shares issued before 6 April 1998: how is relief given?


The relief is given by treating the gain as not arising until some future date. There is no requirement that the proceeds of the disposal are actually invested in the subscription for the new shares. The relief has to be claimed.


In the tax year 1996-97 an investor makes the following transactions:

  • In May disposes of a property incurring an agreed chargeable gain of £84,000.
  • In September subscribes for and is issued £60,000 worth shares in an EIS company on which they get Income Tax relief.

The investor can make a claim for up to £60,000 of the £84,000 gain to be deferred.