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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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EIS: deferral relief: shares issued on or after 6 April 1998: qualifying benefits


The provision of a benefit or facility is treated as a receipt of value by the investor unless a cash payment equivalent to the value of the benefit would have been a qualifying payment, see VCM23340. Qualifying payments include reasonable remuneration to employees so if the investor is an employee and receives benefits from the company he will not be treated as receiving value provided that the benefits are part of a reasonable remuneration package. If the benefits are not reasonable by reference to the duties of the employment there will be a receipt of value and the shares will not be eligible for relief. As a result the deferred gain comes back into charge, see VCM23300.