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TaxRobin
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Category: Tax
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Experience:  International tax
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Can I roll my business asset disposal relief tax into an

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Can I roll my business asset disposal relief tax into an Enterprise Investment Scheme?

A capital gain on the disposal of a trading asset can be deferred by rolling it over against the cost of another business asset but not into EIS

Customer: replied 15 days ago.
Thank you for your reply but I was advised to do this, so was the advice incorrect? I have sold my business and I was advised that the CGT (@10%) due could be rolled into an EIS and thereby defer it and also maybe get a tax rebate based on the 30%? Is this not possible? Thank you.

To defer CGT, only the value of the gain needs to be invested into EIS shares.

CGT deferral can be applied to gains that occurred up to three years before the date that EIS shares are purchased. CGT on gains which occur up to 12 months after the EIS share purchase date can also be deferred. However, CGT deferrals and other EIS tax reliefs are only available once the investor has received an EIS3 certificate from HMRC.

Customer: replied 15 days ago.
Thank you for the clarity on this. What is an EIS 3 certificate pls?

This form is used by the company invested in to certify that certain conditions of the scheme are satisfied. If, exceptionally, your investment was made through an approved investment fund, the company will issue form EIS3 to the fund manager instead, and you’ll receive form EIS5, ‘Certificate and claim to relief for investment through an approved fund’ from the manager.

Ask the fund manager

Customer: replied 15 days ago.
Thank you so much

You are welcome

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