VCM30200 - EIS disposal relief: example

  • July 1994 an investor subscribes £150,000 for 100,000 shares in an EIS company.
  • Maximum Income Tax relief of £20,000 is given in the tax year 1994-95.
  • January 2000 all the shares are sold for £270,000.

The chargeable gain is calculated as below.

Disposal proceeds

£270,000
Less cost

£150,000
Unindexed gain

£120,000
Less indexation to April 1998, see CG17207

£19,350
Chargeable gain

£100,650


The TCGA92/S150A(3) formula is:

1.

=

2.   Amount of tax relief

=

3.   £20,000
BSubscription x Lower rate of tax 1994-95£30,000


The chargeable gain exemption is restricted to:

£100,650 x 2 / 3 = £67,100

The chargeable gain before taper relief becomes £100,650 - £67,100 = £33,550.

Home|Main Contents|Manual Contents

Previous Page|Next Page|Top|Menu