Share Loss Relief: individual and corporate claimants: individual claimants: types of qualifying share
Shares to which EIS relief is attributable
This is one sub-set of qualifying shares. For the purposes of Share Loss Relief, EIS relief is relief given under either of two heads. It is either income tax relief under Part 5 of ITA 2007 or (in relation to shares issued after 31 December 1993 and before 6 April 2007) it is relief under ICTA88/CH3/PT7. It is not the same as relief under the Business Expansion Scheme, which was available in respect of shares issued before 1 January 1994. For guidance on income tax relief under the Enterprise Investment Scheme, see VCM10500+.
Shares in a qualifying trading company
Shares in a qualifying trading company which were subscribed for by the individual claimant comprise the second sub-set of qualifying shares. For the meaning of ‘subscribed for’, see VCM74060.
The definition of a qualifying trading company is complex and has been amended from time to time over the years. It is considered in detail later in this guidance. In summary, section 134 ITA 2007 imposes four ‘high level’ conditions (A - D) each of which must be met. Each of these high level conditions has two or more subsidiary requirements some or all of which must be met in order for the high level condition to be met. The following table introduces the high level conditions and their subsidiary requirements and provides links to more detailed guidance.
High level condition A: subsidiary requirements to be met at time of, or prior to, disposal of shares
All four subsidiary requirements must be met.
|The trading requirement||S137||VCM74610 to VCM74790|
|The control and independence requirement||S139||VCM74900 to VCM74910|
|The qualifying subsidiaries requirement||S140||VCM74920 to VCM74940|
|The property managing subsidiaries requirement||S141||VCM74950 to VCM74970|
High level condition B: subsidiary requirements in A also to be met throughout a specified period
Subsidiary requirements are alternative to one another
|subsidiary requirements in A to be met for continuous period of six years||S134(3)(a)||VCM75000|
|subsidiary requirements in A to be met for less than six years providing previous activities are limited||S134(3)(b)||VCM75000|
High level condition C: Upper limit on size of company issuing shares
Both subsidiary requirements must be met
|Gross assets requirement met before and after share issue||S134(4)(a) & S142||VCM75100|
|Unquoted status requirement met at the relevant time||S134(4)(b) & S143||VCM75110|
High level condition D: UK Business
Originally a requirement that the company be UK resident
|Company must carry on its business wholly or mainly in UK throughout a specified period||S134(5)||VCM75120|