There is a deferral of unlimited capital gains that have arisen within thirty-six months before or will arise within twelve months of an investment made in any EIS Qualifying Company. In other words, although the amount on which EIS Income Tax Relief and the Capital Gains Tax Exemption are available is limited to £400,000, there is no limit on the amount of capital gains that can be deferred.
The investor can invest an amount equivalent to the capital gain in investments made in one or more EIS Qualifying Companies.
Example
£
Initial investment
50,000
EIS Income tax relief
(10,000)
Capital Gains deferral
(20,000)
Net cost of investment
20,000
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