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It is not sufficient simply for the investment and investor to satisfy the qualifying conditions at the outset. Instead, one must continue to satisfy the various conditions until the termination date of the shares which is usually a three-year period.
Where this does not happen then relief may be withdrawn either partly or in full.
References to withdrawal of EIS income tax relief also applies to CGT disposal / exemption relief as well.
EIS income tax relief may be withdrawn in full, or there may be a reduction in the amount of relief, where either the following occurs:
Example of disqualifying events might include:
Where there is a disqualifying event then the investor has 60 days to notify HMRC of the event.
If you have any queries about EIS, whether as a potential investee company or investor, then please do get in touch.
Albeit, we can’t give you investment advice as we are not regulated by the Financial Conduct Authority – so please get that type of advice from someone who is!