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?
this sort of thing ??
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.
Either way the shares were bought in 2019 and I never sent off a form
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 -
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).
- 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.