VCM26210 - EIS: income tax relief: report of events resulting in withdrawal

ICTA/S310 (2); ITA/S241

The legislation provides for an officer of HMRC to be notified in writing where any event occurs which removes the original entitlement to relief.

A company, and any person connected with the company (within the meaning given at ITA/S993) who has knowledge of the matter, have to notify HMRC within 60 days if:

• an event occurs as a result of which the company is not a qualifying company,
• the company, or a connected person, gives value to any of its shareholders,
• the company does anything which disqualifies an individual from the relief under the replacement capital rules (see VCM25310),
• the company using the money raised ceases to satisfy the conditions applying to it,
• the money raised by the issue has not been employed for the purpose of a qualifying business activity within the time allowed (see VCM12090).

In the case of a connected person, the 60 day period runs from the date of his coming to know of the event.

ICTA/S310 (1) and ITA/S240 place similar obligations on an individual who has had relief.

Failure to give a notice attracts penalties under TMA70/S98.