Deferral relief

Our client has made a gain on the sale of two separate investment properties. One is at non-business taper rate and the other one is at a mixed taper rate. Our client made an enterprise investment scheme (EIS) investment and we claimed the capital gains tax deferral relief before the proposed new legislation was announced.

On the asset where there is full non-business taper relief HMRC have accepted our claim. On the asset where there is mixed taper relief we have deferred the gain against the non-business taper rate leaving the business taper rate as chargeable. HMRC have not accepted this. Their view is you should first deduct the EIS deferral recalculate the gain and then apply the taper at a non business and business rate.

Who is correct?

With regard to the proposed capital gains tax changes if the gain under old rules is ...