I am interested in an investment in a startup through Crowdcube and aware that this particular one is eligible for EIS tax relief of up to 30%.
I have come across one of the relevant section on HMRC, which says
Tax relief for a different year – your choices
The general rule is that the relief is available for the tax year in which the shares are issued. But if you choose, you can treat some or all of the shares as issued in the previous year and claim relief in that previous year, subject to the maximum £1 million relief limit for the year. You’ll find the date of issue of your shares recorded on form EIS3 or EIS5.
If you want to make use of this option:
•enter on your tax return the amount which you want to claim for in tax year 2017 to 2018, including any amounts invested in tax year 2018 to 2019 for which you already hold a valid EIS3 or EIS5 and which you want to have relieved in tax year 2017 to 2018 – remember, the maximum you can claim in total for tax year 2017 to 2018 is £1 million
•if you want to treat some or all of the shares subscribed for in tax year 2017 to 2018 as though subscribed for in tax year 2016 to 2017, complete the claim form in form EIS3 (or EIS5) to show the amount on which you’re claiming relief for the previous year and send it to us
If you’ve invested through an approved investment fund, you’ll normally get relief in the year in which the fund closes. The date the fund closed will be shown on the form EIS5 which the fund manager gives you. As described above, you can claim to have relief in the year before that in which the shares were issued.
Please note that you’ll only be able to claim relief in the year before the year in which the fund closed, if the shares were issued in the same year as the year in which the fund closed.
The wording is a little unclear so I was wondering if anyone could help interpreting. The questions are:
1) If I invest now, in 2018/2019, but my total annual Income Tax was higher in 2017/2018, am I allowed to claim my last year's releif instead, just to maximise it?
2) Can I claim releif in both of these years, like you can with SIPPs (when they go over 40k), for example?
Thank you very much for your help!
