EIS—circumstances in which relief is withdrawn or reduced

The following Tax practice note provides comprehensive and up to date legal information covering:

  • EIS—circumstances in which relief is withdrawn or reduced
  • Withdrawal or reduction of EIS income tax relief
  • Receipt of value
  • Relief withdrawn because investor ceases to be eligible for EIS relief
  • Relief withdrawn because shares or company cease to be eligible for EIS relief
  • Notification requirements
  • Individual investors' notification obligations
  • Issuing company's notification requirements
  • HMRC's powers
  • Calculating the clawback—disposal of EIS shares
  • More...

EIS—circumstances in which relief is withdrawn or reduced

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

Coronavirus (COVID-19): In response to the coronavirus (COVID-19) pandemic, the government introduced a Future Fund, under which innovative companies can access government funding, subject to a commitment of equal funding from private investors in the form of a convertible loan note that can either be redeemed or converted into shares. Section 110 of Finance Act 2020 ensures that such investments do not jeopardise the Enterprise Investment Scheme or Seed Enterprise Investment Scheme reliefs on existing shareholdings. For more information, see Practice Note: Coronavirus (COVID-19)—tax implications—Future Fund: EIS and SEIS relief.

The Enterprise Investment Scheme (EIS) is designed to encourage investment in smaller, higher-risk trading companies by offering a range of tax reliefs to individual investors purchasing newly issued shares in those companies.

For full details of these tax reliefs, see Practice Note: EIS—introduction to regime and

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