VCM30300 - EIS disposal relief:
Income Tax relief reduced
TCGA92/S150B
The CGT exemption may have to be restricted if:
- the investor's Income Tax relief is
reduced because they have received value from the company and
ICTA88/S300 (1A)(a) or ITA/S213 applies, see
VCM26360.
- ICTA88/S303 (1A)(a) or ITA/S224 applies to
reduce an investor's Income Tax relief where a company repays,
reduces or repurchases any of its share capital or makes payments
for giving up rights to share capital, see
VCM26400 onwards.
The restriction is calculated as follows:
- compute the chargeable gain in the normal
way including the operation of TCGA92/S150A (3), see
VCM30150.
- reduce the exemption by an amount
calculated by multiplying the gain by the fraction:
|
Reduction in relief
|
| Total relief
attributable to the shares before the reduction |
If TCGA92/S150A (3) applies to reduce the exemption the fraction
should be applied to the exempt part of the gain and the deduction
made from the exempt part of the gain. If the relief has been
reduced on more than one occasion the numerator of the fraction is
the total amount of all the reductions.
