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HMRC internal manual

Venture Capital Schemes Manual

EIS: deferral relief: shares issued before 6 April 1998: disposals


Disposals are the commonest type of transaction. There are identification rules to determine whether the shares disposed of result in a release of any deferred gains. These rules are necessary because a taxpayer may hold shares in an EIS company and only some of the shares may have attracted deferral relief.

There is no pooling of shares which have attracted relief(s) before 6 April 1998 and the last in first out and other rules introduced by FA98 do not apply.

The share identification rules are set out in TCGA92/SCH5B/PARA4. Disposals are identified on a first in/first out basis where shares are acquired on different days.

If shares are acquired on the same day, disposals before 6 April 1998 are identified first against shares which have not had deferral relief, see VCM23160.