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HMRC internal manual

Venture Capital Schemes Manual

EIS: deferral relief: shares issued on or after 6 April 1998: meaning of qualifying payment


Qualifying payments are defined as:

  1. Payment of any remuneration, provided that the remuneration is reasonable in relation to the employee’s duties.
  2. Reimbursement of expenses incurred wholly, exclusively and necessarily as an employee.
  3. Payment of any interest which is at a reasonable commercial rate.
  4. Payment of normal dividends or other distributions.
  5. Payment for supply of goods which is not in excess of their market value.
  6. Payment for the acquisition of an asset which does not exceed its market value.
  7. Payment of rent which does not exceed a reasonable commercial rate.
  8. Payment of remuneration which is reasonable and necessary for services rendered, and which is taken into account in computing Case I or II profits of the business in question.
  9. Payment to discharge an ordinary trade debt, see VCM23330.