Eis

Financial Chat
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Could someone dumb down what I should be doing regarding EIS forms sent to me through Crowdcube? Do i need to submit it straight away?

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this sort of thing ??

https://www.gov.uk/government/publications/enterprise-investment-scheme-income-tax-relief-hs341-self-assessment-helpsheet/hs341-enterprise-investment-scheme-income-tax-relief-2020

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I’m not particularly bothered about the income tax relief but more so the potential capital gains tax relief when cashing out after at least 3 years. Do I just apply for that when I cash out or do I have to submit an EIS form when I received the share certificate. :thinking:

Either way the shares were bought in 2019 and I never sent off a form :man_shrugging:

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No expert , but to me the EIS is a tax relief on what money you have invested in a company against other income taxes that you pay in the tax year ie salary , rent from property , unearned income etc …

CGT is when you sell the shares, be it the whole tranche or in blocks that keep you under the CGT allowance in the year ???

edit - told you I was no expert - :slight_smile:

so presumably you can claim tax relief on your investment on your yearly tax return with your EIS form details , and then pay no CGT in the future when you sell

If you invest in EIS-qualifying companies, and depending on your personal circumstances, you may benefit from:

  • 30% income tax relief – your income tax bill can be reduced by 30% of the amount invested into EIS. This relief can be applied to the tax year in which you purchase the shares, or carried back to the previous year.
  • Tax-free gains – gains on EIS investments are not subject to Capital Gains Tax (CGT). :point_left:
  • CGT deferral – if you owe tax on another gain, for example from the sale of a share portfolio or investment property, you can defer the payment of CGT by investing the value of the gain into EIS-qualifying companies.
  • Loss Relief – if your EIS investments underperform, you can offset any losses against other income or gains.
  • Inheritance Tax relief – if held for two years, and still held at the investor’s death, EIS investments may be exempt from Inheritance Tax.
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