VCM20110 - EIS: disposal relief: losses: example
- June 2018 an investor subscribes 拢100,000 for 50,000 shares in an EIS company. Income Tax relief of 拢30,000 is given in 2018-19, as the EIS rate is 30%.
- January 2021 the investor sells all 50,000 shares for 拢60,000. Income Tax relief of 拢18,000 on the 拢60,000 is withdrawn (拢60,000 x 30%, the EIS original rate). Income Tax relief of 拢12,000 is not withdrawn and remains attributable to the shares sold. The allowable loss is calculated as below.
| Description | Amount | Total |
|---|---|---|
| Disposal proceeds | - | 拢 60,000 |
| Less cost | 拢100,000 | - |
| Reduced by Income Tax relief* | 拢 12,000 | 拢 88,000 |
| Allowable loss | - | 拢(28,000) |
*This is the EIS Income Tax relief not withdrawn which remains attributable to the shares sold.