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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I invested into an EIS which has gone into liquidation. I

Resolved Question:

I invested into an EIS which has gone into liquidation. I received 30% tax relief on investment but now that the business has failed, can I get further tax relief? I have been told only against capital gains rather than income....is this correct?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.

Hi.

Subject to meeting the criteria, you can claim income tax relief against income for a loss on EIS shares (the original investment less the income tax relief given). You can claim relief against income of for the tax year of the loss or against income of the previous tax year.

Take a look here and here for more information.

I hope this helps but let me know if you have any further questions.

Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
Im not fully understanding>> from what you sent I can only claim against capital gain. What do you mean if i meet certain criteria? what is negligible value?
Expert:  TonyTax replied 1 year ago.

Let me get my reference back up.

Customer: replied 1 year ago.
tis
Expert:  TonyTax replied 1 year ago.

You need to make a claim for the loss in your tax return for the tax year that the shares became worthless and then chose whether you want to claim income tax relief against the tax year of the loss or the previousl tax year. I've dont it many times for clients. Why do you think you can only make a claim against gains?

Customer: replied 1 year ago.
Thanks.....my new accountant says it can only be claimed against capital gain..........so I'm regretting moving
a little and needed confirmation of my thoughts
Expert:  TonyTax replied 1 year ago.

If you look at the SA108 CG pages here, you are given the option of claiming certain capital losses against income.

Customer: replied 1 year ago.
This is all capital gains........what about income? sorry if I'm being stupid
Expert:  TonyTax replied 1 year ago.

You enter the loss in the quoted or unquoted boxes on page CG2 and then claim income tax relief in boxes 12 and/or 13 on page CG1.

Expert:  TonyTax replied 1 year ago.

Not at all.

Expert:  TonyTax replied 1 year ago.

Or boxes 14 and 15 on page CG1.

Expert:  TonyTax replied 1 year ago.

If the company still exists put NVC (see page 3 of the notes here) in box 22 on page CG2. If the company has been duissolved, put OTH in box 22 on page CG2 instead. Then, give details of the claim in box 38 of page CG2

Customer: replied 1 year ago.
Thank you..........Ill talk with him.......................
my big problem is that i was a substantial earner before retiring my self in Sep 2014. I am living on savings until i take my pension. I do have the ability to crete earnings from my sipp to take me back into a 40pct tax payer
Expert:  TonyTax replied 1 year ago.

The higher your income in the tax year of loss or the previous tax year, the better.

Customer: replied 1 year ago.
the company went into liquidation this year which is 2016....can i really use my income pre 2014?
Expert:  TonyTax replied 1 year ago.

If the loss is incurred in 2016/17. you can claim against income of 2016/17 or 2015/16. See the notes here.

Customer: replied 1 year ago.
Thats my problem thanks.....................
Expert:  TonyTax replied 1 year ago.

If the company was in trouble in an earlier tax year, you can try to claim that the shares were of neglible value in an earlier tax year and, if you are successful, claim tax relief against that tax year or the one before.

Customer: replied 1 year ago.
i don't think i can do that but thanks for your help Tony
Expert:  TonyTax replied 1 year ago.

Thanks.

Would you mind rating my answer before you leave the site please.

TonyTax and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
sure