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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 16102
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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EIS loss relief; I bought some shares (£10,800) in Sept 2015

Customer Question

EIS loss relief; I bought some shares (£10,800) in Sept 2015 and the company is not doing well at all. the business will be sold and my shares will be sold in Sep 18 for 420£.
Does that count for 3 year?
I already got back 30% of the initial investment on my tax return 15/16. How do I claim my loss?
Submitted: 4 months ago.
Category: Tax
Expert:  TonyTax replied 4 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 4 months ago.

If you sell the shares within 3 years of the original investment, you will lose the income tax relief you had (£3,240 - 30% of £10,800). The loss of £10,800 will be relievable agianst income or against capital gains whichever is more advantageous to you. If you sell the shares after three years you won't lose your oncome tax relief but the capital loss will be reduced to £7,560. Take a look at Example 1 here.

Complete the capital gains page CG2 to claim income tax relief for the loss.

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

Customer: replied 4 months ago.
Hi,
1/ about the 3years; bought shares 15/09/2015 ( payment date) sold 1/10/2018. Does that count as 3 years?
2/ I don’t have capital gain to offset it with. How do I offset this loss against my salary income?
Expert:  TonyTax replied 4 months ago.

1 See under the heading "How long must I keep the EIS shares" here.

2 See boxes 41 and 42 on page CG2 here. This is part of the capital gains pages for 2017/18. As you will be selling in 2018/19, the 2019 CG pages are not available yet.

Customer: replied 4 months ago.
1 is still not clear to me.. do I have to hold these shares for 3 full accounting years of the company or the 3 calendar years are enough?
2/ if I sell on 1/10/2018 is there a possibility to use this tax benefit in 2017/18 tax year or not?
Expert:  TonyTax replied 4 months ago.

1 Was the company trading when you acquired your shares?

2 Do you want to back date the loss one tax year?

Expert:  TonyTax replied 4 months ago.

2 You can back date the loss to 2017/18 to offset it against your income of that tax year if you wish.

Expert:  TonyTax replied 4 months ago.

1 The three year minimum holding period commences on the later of:

i the date of issue of the EIS shares and

ii the date the company started trading

as stated under the heading "How long must I keep the EIS shares"

https://www.blickrothenberg.com/getmedia/c55664ac-8a74-4a54-970a-8d77fa50f001/EIS-FAQs.pdf.aspx

Customer: replied 4 months ago.
ok got it thanks.
Expert:  TonyTax replied 4 months ago.

That's great.

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