Readers' forum : Loss of EIS relief?

28 November 2017

Issue: 4626 / Categories: Forum & Feedback

If a company is taken over, will an investor lose EIS relief?

My client has subscribed for some enterprise investment scheme (EIS) shares in a company. To my surprise the company is seemingly doing very well. So well in fact there is serious talk of an AIM flotation soon.

The problem is that this flotation may well occur before the EIS termination date. So far all the conditions of the EIS relief have been met and income tax relief has been enjoyed. There is talk of the AIM company being a new holding company (Holdings plc) and it appears my client will be asked to exchange his EIS shares in the existing singleton company for new shares in Holdings plc. If this takes place before the termination date in respect of his shares will the EIS relief be clawed back?

My client is worried that he will lose tax relief. Can this be avoided?

Query 19 080...

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