VCM30350 - EIS disposal relief: TCGA92/S150B (2): example
In this example TCGA92/S150A (2) applies but TCGA92/S150A (3) does not.
- July 1994 investor subscribes £100,000 for 100,000 shares in an EIS company. Maximum Income Tax relief of £20,000 is given in the tax year 1994-95.
- August 1996 the investor receives £20,000 value from the company. The Income Tax relief is reduced by £4,000 by making a Case VI assessment.
- January 2000 all the shares are sold for £270,000.
The chargeable gain is calculated as below.
| Disposal proceeds | £270,000 |
| Less cost |
4. £100,000 |
| Unindexed gain | £170,000 |
| Less indexation to April 1998, see CG17207 |
5. £12,900 |
| Chargeable gain |
£157,100 |
The exemption is reduced by the following amount:
| Chargeable gain | x |
Reduction in relief |
|
|
| Relief attributable to shares before the reduction |
| £157,100 | x |
6. £4,000 | = | £31,420 |
| £20,000 |
£125,680 of the gain is exempt and £31,420 is
chargeable, subject to taper relief.
