Enterprise Investment Scheme - Loss Relief

by **Andrew9999** on Sun Jan 15, 2012 3:14 pm

I made an EIS investment in 2002. I claimed the 20% relief when the investment was made, but the company failed and was dissolved in 2010/11. The investment was 20k and the company definitely qualifies for EIS loss relief. Having claimed 4k originally, my understanding is that I can now offset the remaining 16k against income, resulting in a reduced tax liability of £6,400 (I am a 40% taxpayer). Would someone be kind enough to confirm this is correct?

Also, where do I enter this on my 2010/11 self-assessment return? I can't find a suitable "box" on the return for this loss relief!

Many thanks.

Andrew.

by **mullet** on Sun Jan 15, 2012 7:01 pm

Yes, if all qualifying conditions are met (broadly "subscribed" shares, not listed on a recognised stock exchange, UK trading company, gross assets limit not breached, shares have become of negligible value) then you claim the balance £16,000 against income. To do this just complete the capital gains pages, show the loss then put the appropriate amount(s) in the box for loss against income 2010-11 or loss carried back to 2009-10. The SA system then does the rest for you. If you are submitting your own tax return, check that the overall result in monetary terms is what you expect (i.e. that relief has been given).
More information is in HS286. http://www.hmrc.gov.uk/helpsheets/hs286.pdf

Box numbers for your tax return CG pages:

6 - total losses
12 - losses used against 2010-11 income
13 - losses used against 2009-10 income

And boxes 22 to 27 for unquoted share disposals.

by **maths** on Sun Jan 15, 2012 10:22 pm

Having claimed 4k originally,

Against what was this offset and in respect of which tax year?

by **Andrew9999** on Sun Jan 15, 2012 10:44 pm

maths wrote:
Having claimed 4k originally,

Against what was this offset and in respect of which tax year?

It was offset against tax due on employment income in accordance with EIS rules. The investment was made during 2002 and I offset 2k in 2000/01 and 2k in 2001/02. Therefore my income tax liability was reduced by 2k for each of these years.

Andrew.

by **Andrew9999** on Sun Jan 22, 2012 3:29 am

mullet wrote:Yes, if all qualifying conditions are met (broadly "subscribed" shares, not listed on a recognised stock exchange, UK trading company, gross assets limit not breached, shares have become of negligible value) then you claim the balance £16,000 against income. To do this just complete the capital gains pages, show the loss then put the appropriate amount(s) in the box for loss against income 2010-11 or loss carried back to 2009-10. The SA system then does the rest for you. If you are submitting your own tax return, check that the overall result in monetary terms is what you expect (i.e. that relief has been given).
More information is in HS286. http://www.hmrc.gov.uk/helpsheets/hs286.pdf

Box numbers for your tax return CG pages:

6 - total losses
12 - losses used against 2010-11 income
13 - losses used against 2009-10 income

And boxes 22 to 27 for unquoted share disposals.

Many thanks for the information. That is just what I needed to know.

Andrew.