How to claim EIS relief on your EIS Fund investments
EIS relief is claimed on an investment-by-investment basis; each Investee Company applies to HMRC for authorisation* to issue the relevant EIS certificates (known as EIS3 certificates) to investors. The EIS3 certificates are forwarded to Investors when they are received from HMRC and should then be used by Investors to claim EIS income tax relief or capital gains tax (CGT) deferral relief.
EIS income tax relief is claimed by the Investor, who must include details from the EIS3 certificate in his self-assessment return for the tax year in which the relief is to be claimed. If the relevant self-assessment return has already been submitted then the Investor can instead complete the claim section on the EIS3 certificate and send it to his tax office.
CGT Deferral is claimed by the Investor completing the claim section on the EIS3 certificate and sending it to his tax office, in the same way as a claim for EIS income tax relief, but the EIS3 must always be submitted to claim Deferral Relief.
The last date for submitting a claim for EIS income tax relief and CGT Deferral is the fifth anniversary of the 31 January immediately following the end of the tax year in which the investment was made. The responsibility for submission rests with the individual Investor.
Prospective Investors should note that they will be regarded, for EIS income tax relief and CGT Deferral purposes, as having made their investment on the date that the shares in the Investee Company are actually issued to them as opposed to the date of Subscription to the MMC EIS Fund. This means that Investors in the MMC EIS Fund may not receive EIS income tax relief and CGT Deferral on their Subscription in the tax year in which the Subscription is made. Relief from CGT on the disposal of shares may be claimed through completion of the Investor’s self-assessment return and completion of the relevant capital gains supplemental pages.
*Please note that no assurance can be given that EIS status will be maintained or granted for the Three Year Period that the investment needs to be held for it to benefit from EIS income tax relief and EIS CGT exemption.
Tax reliefs available under the Enterprise Investment Scheme:
You should note that the favourable tax treatment outlined above may not continue in the future and that other taxes or costs may arise which are not paid through MMC or imposed by MMC. The information in this document has been drafted on the basis that each Investor is an additional rate taxpayer, the additional rate being and 45% for 2016/17. If you are in any doubt about your tax arrangements, you should contact a qualified tax adviser for appropriate tax advice.