VCM26000 - EIS: income tax relief: reduction and withdrawal of relief
The legislation provides for the complete withdrawal of any
relief attributable to shares if, by reason of some event, any of
the conditions for the relief ceases to be satisfied (see
VCM26200). This is additional to the
general power to withdraw relief under TMA70/S29 (1)(c) where an
HMRC officer discovers that the relief is excessive, which would
apply if, for example, it was found that the statement given by the
company on form EIS1 was incorrect.
The legislation also provides for the amount of relief
obtained, or otherwise available, to be reduced where during the
relevant qualification period:
- the subscriber disposes of his or her shares (see VCM26010 onwards),
- the subscriber receives value from the company or a connected person (see VCM26300 onwards),
- the company purchases any of its own shares from a member who has not had relief (see VCM26400),
- the subscriber disposes of any share capital or securities of the company to a person connected with the company (see VCM26330).
Guidance on the procedure to be followed when the officer
dealing with the company finds that relief falls to be reduced is
given at
VCM26510.
Withdrawal of relief is usually by Special Assignment (see
VCM26530), but if the individual makes an amendment (in time) to
his self assessment that can be accepted, and any assessment
already made can be vacated.
