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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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Share Loss Relief: individual and corporate claimants: individual claimants: qualifying shares and 'eligible shares'

Share Loss Relief in the context of individual claimants uses the concept of ‘qualifying shares’. This term is not used in the statute relating to company claimants, where the principal requirement is that the shares in question must have been issued by a qualifying trading company.

The term ‘eligible shares’ is not used in the statute. This guidance uses it to mean shares an allowable loss on which may be, or is, available to produce Share Loss Relief, that is to say shares which actually are - or are capable of being at a later time when they are disposed of - qualifying shares. Remember that you cannot be certain whether any share actually is a qualifying share or not until it has been disposed of, because certain conditions must be met at the time of the disposal.

Shares are qualifying shares if EIS relief is attributable to them or if they are shares in a qualifying trading company which the individual subscribed for. Thus the concept of a ‘qualifying trading company’ is common to the rules for individual claimants and those for company claimants. Note that companies to whose shares SEIS relief is attributable (VCM30000+) are not automatically ‘qualifying companies’, though Share Loss Relief is available on such shares if all the conditions are met.