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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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EIS: deferral relief: shares issued before 6 April 1998: taper relief on gain brought back into charge

The deferred gain is treated as accruing at the time of the chargeable event listed in VCM22070. The gain is not recomputed to give further indexation allowance from the date of the original disposal to the date of the chargeable event or April 1998. FA98 froze indexation allowance at April 1998 except for companies, see CG17207.

Taper relief, see CG17895 onwards, should be computed on the amount of the deferred gain accruing as if the accrual occurred on the date of the original disposal. There is no further taper relief due from the date of the original disposal to the date of the chargeable event. Any gain or loss accruing on the disposal of EIS shares themselves in respect of the period for which they were held is treated separately.