For Investors who Normally Complete a Tax Return Form:
You can claim relief on your Tax Return form by completing the Additional Information Section on the EIS certificate that we issue to members. In Box No 2 on Page 2 you need to enter the total value of the investment upon which you are claiming relief. In the large box on Page 4 of the Additional Information Section you need to provide details of the name of the company invested in , the amount invested, the date of issue of the shares and the name and reference number of the HMRC office issuing the tax certificate.
All this information is on the EIS certificate we’ve issued to members.
You do not need to complete pages 3 and 4 of the EIS certificate. You do not need to send the EIS Certificate to HMRC but you do need to retain it in a safe place. HMRC may request to see the certificate as evidence in support of your claim.
The tax relief will normally be allowed in the year in which the shares were issued to you. If you wish to claim relief against the previous tax year you can either amend the Tax Return previously submitted for the earlier year, or fill out Page 3 and 4 (as detailed below) and send it to your HMRC office.
For Investors who do not Normally Complete a Tax Return Form
If you are employed under PAYE or retired and do not normally complete a Tax Return form, the procedure for claiming relief against tax deducted from you is slightly different. You need to complete the blank sections on Pages 3 and 4 of the EIS Certificate. The details you need about the date of issue and the HMRC office reference number can be found on Page 1 of the certificate.
Detach Pages 3 and 4 of the EIS certificate and send it to the HMRC office that deals with your tax deductions. If you are employed or have a pension from a former employer you will be able to find details of the HMRC office dealing with your affairs from your employer. If you cannot find this information you will need to telephone HMRC on 0300 2003300.
The tax relief will normally be allowed the year in which the shares were issued to you. There is a space on Page 3 of the form to specify if you wish to claim the relief against the preceding tax year.
Tax Relief Available:
Income Tax relief is available at 30% of the sum invested (also in case of using a PAN card). The tax can be reclaimed against tax paid in the tax year the shares were issued or the previous tax year. The tax relief is restricted to the amount of tax the tax payer has paid in the relevant years. If you have paid little or no tax you will receive little or no tax relief.
Once the shares have been held for at least two years they are designated as ‘business property’ for the purposes of Inheritance Tax. This means that they are 100% exempt from IHT.
Capital Gains Tax Deferral. If a taxpayer has a capital gains tax liability taxable gain can be deferred by reinvesting an equivalent sum in these shares. In effect, the liability is deferred until the shares are cashed in.
