EIS/VCT - Tax Treatment Flashcards
1
Q
Tax treatment of EIS / VCT
A
IT:
- VCT divs are tax free
- EIS divs are taxable /don’t normally pay a div
IT relief:
- EIS and VCT provides 30% IT relief
- but combined relief is limited to the IT liability of the investor in the tax year of investment.
- carry back to previous year allowed for EIS but not VCT
- tax relief if money disinvested within 3 years for EIS or 5 years for VCT
IHT:
- if there is business shares it will qualify for BR
- if invested into an EIS then will be eligible for reinvestment relief
- as long as the funds are reinvested within 3 years of date of sale of the business
- anyone not owning the shares has to wait 2 years for EIS to qualify for BR
- VCT don’t receive BR / form part of estate
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