Investing
How to claim EIS relief, step by step
You cannot claim EIS relief when you invest. You claim it once the company issues your EIS3 certificate, which it can only do after it has been trading for four months and HMRC has authorised it.
The sequence matters, and it catches people out. Investing in an EIS round does not give you anything to claim with. The paperwork comes later, from the company.
Process
Claiming EIS relief
- 01
1. Invest and wait
The company must carry on its qualifying trade for four months before it can apply to HMRC using form EIS1.
- 02
2. HMRC authorises
HMRC issues the company an EIS2 authorisation, which allows it to issue certificates to its investors.
- 03
3. You receive EIS3
Your EIS3 certificate shows the company, the amount subscribed, the share issue date and HMRC's unique reference. Keep it.
- 04
4. Make the claim
Enter the details in the 'Other tax reliefs' section of your self assessment return, or claim by post if you do not file one.
- 05
5. Elect for carry back if useful
State on the claim if you want all or part of the subscription treated as made in the previous tax year.
If you do not file a self assessment return
You can claim by completing the claim form on pages three and four of the EIS3 certificate and sending it to HMRC. Relief can be given by adjusting your PAYE tax code for the current year, or as a repayment for an earlier year.
Other EIS claims
- Deferral relief on a gain reinvested into EIS shares is claimed using the claim form attached to the EIS3 certificate.
- Capital gains exemption on the disposal of EIS shares is reported through the capital gains pages of your return.
- Loss relief, where the company fails, is claimed against income or gains in the relevant year.
HMRC's helpsheets HS341 and HS297 set out the income tax and capital gains positions respectively. The SEIS equivalent of this guide is how to claim SEIS relief.
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Written by
Craig Peterson
Co-Founder and Chief Operating Officer, GCV Labs
Craig Peterson is Co-Founder and Chief Operating Officer of GCV Labs, where he has helped create, launch and scale technology-enabled ventures including Intelligence Fusion, n-gage.io, Business Finance Market, Valius Global and Quva.
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