Q&As

What are the consequences of an employee director who has already acquired SEIS shares, acquiring EIS shares within three years of the acquisition of SEIS shares?

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Published on LexisPSL on 10/03/2017

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • What are the consequences of an employee director who has already acquired SEIS shares, acquiring EIS shares within three years of the acquisition of SEIS shares?
  • Impact on EIS relief
  • Impact on SEIS relief

This Q&A considers:

  1. whether or not the employee director would be entitled to EIS tax relief on the second acquisition of shares, and

  2. the impact of such an acquisition on the person’s SEIS tax relief

Impact on EIS relief

An individual must meet a number of conditions in order to obtain tax reliefs under the EIS regime, these are fully explained in Practice Note: EIS—conditions for relief: individual investor conditions. One of those conditions is that the individual is not connected with the issuing company at any time during:

  1. the two-year period before the issue of shares, and

  2. the three-year period after the issue date or (in certain circumstances) after the date on which the qualifying trade began

Any person that is an e

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