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HMRC internal manual

Venture Capital Schemes Manual

EIS: deferral relief: shares issued on or after 6 April 1998: qualifying time


The deferral relief shares must be issued in the period beginning 12 months before, and ending three years after, the accrual of the gain on which relief is claimed.

HMRC has statutory powers to extend these time limits which have not been delegated to HMRC officers in area offices.

HMRC will extend the time limits where the claimant can show that he or she:

  • had a firm intention to comply with the time limits, but
  • was prevented by some fact or circumstance beyond his or her control from complying, and
  • acted as soon as he or she reasonably could after ceasing to be so prevented.

It is a question of fact and degree and each case is considered on its own merits. Examples of circumstances outside the claimant’s control might include death or serious illness of a vital party at a crucial time, unsettled disputes or litigation or unexpected delay in receipt of disposal consideration.

A mere change of intention at a late stage or a shortage of funds arising out of the application of the disposal consideration to some purpose other than the subscription for EIS shares will not normally be regarded as circumstances beyond the claimant’s control. In particular, where a claimant chooses to defer applying for shares until late in the statutory reinvestment period any subsequent issue of shares outside that period will not normally be regarded as a circumstance beyond the claimant’s control justifying an extension to the time limit.

No decision on a possible extension of the time limits can be made until the disposal has taken place, the EIS shares have been issued and all other conditions of relief are satisfied.

If the EIS shares have been issued outside the statutory time limits and a request is made for an extension the HMRC officer should explain the criteria set out above to the claimant so that they can demonstrate their case. The officer should then make a report to Specialist PT (Capital Gains) with their recommendation and the claimant’s file.