Page 61 - Praetura EIS 2019 Information Memorandum

EIS Tax Advantages

Income Tax Relief Inheritance Tax Relief Loss Relief
Investors can obtain income tax relief up to Under Business Property Relief, shares If shares are disposed of at a loss, the
a maximum of 30% on the amount invested which have been held for at least two investor can elect that the amount of the
in EIS Qualifying Companies. The claimable years may qualify for 100% Inheritance Tax loss, less Income Tax relief given, can be
investment amount is capped at £1,000,000, Relief providing the shares are in a trading set against income of the year in which they
with a further £1,000,000 available in company and are still owned at the date were disposed or, on income of the previous
Knowledge Intensive Companies, for the of death. No upper limit is applied to the year instead of being set off against any
2018/19 tax year. This equates to a maximum claimable amount of Inheritance Tax Relief. capital gains.
relief of £600,000 and is limited to the
investor’s tax liability in the tax year in which
the Fund closes. Shares must be held for at Capital Gains Tax Deferral
least three years from the date of issue or the Capital Gains Tax due from the disposal of any
tax relief will be withdrawn. asset can be deferred by the investor through
the re-investment of the chargeable gain into
EIS qualifying shares. The amount of gains
Capital Gains Tax Exemption which can be deferred is limitless and investors
Investors are exempt from Capital Gains Tax may benefit from this relief providing the EIS-
realised on the disposal of EIS-qualifying shares qualifying investment must be made within
providing the shares were held for at least three one year preceding the date the gain arose of
years and initial Income Tax Relief has been three years after. The period of deferral expires
awarded but not withdrawn. at the earlier of when the shares are disposed
of or the investee company ceases to qualify.

61

Further detail on EIS tax reliefs are provided within the Appendices