In November 2020, the Office of Tax Simplification (OTS) published its report on Capital Gains Tax on...
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Capital Gains Tax Reliefs via SEIS
Interestingly, if the shares were sold before the three years condition is met they may still qualify for Business Asset Disposal Relief. In order to claim CGT disposal relief, taxpayers must have received income tax relief on the cost of the shares. If no claim to income tax relief is made, then any other sale of the shares will not qualify for exemption from CGT.
There is also an additional exemption from CGT, known as CGT: reinvestment relief. This applies where assets are sold and all or part of the gain is invested in shares that qualify for SEIS. Reinvestment relief is available at 50% of the CGT on gains reinvested within the SEIS. The maximum gain to be relieved is capped at £100,000, resulting in a maximum CGT relief of £14,000, and the relief will be withdrawn if the SEIS relief is ultimately withdrawn.
This shows just how important it is to get professional advice when making an SEIS or EIS investment and how to maximise the available reliefs.
If you would like any assistance regarding capital gains tax, SEIS or EIS tax reliefs, do not hesitate to get in touch with us via the contact form or call 020 3728 2848.