VCM26020 - EIS: income tax relief: relief attributable to shares

ICTA/S289B; ITA/S201

Normally the amount of income tax relief attributable to a holding of shares will be self- evident. Where, however, the maximum amount on which relief is available for a year (see VCM25430) is exceeded, the position is not clear. In this situation the total relief obtained for the year is apportioned between all the holdings of shares for which relief was claimed, or the individual can choose to claim relief on some shares and not on others.

Example

Mr Green subscribes £200,000 for shares in each of four qualifying companies in 2006/7, giving a total investment of £800,000. But he can only claim relief on a maximum of £400,000. So, for instance, he can opt for relief to be given at 20% on the subscriptions for all the shares in 2 of the companies, or have the relief given at 10% on the subscriptions for all the shares in all four companies.