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VCM14160 | Venture Capital Schemes Manual: the Enterprise Investment Scheme: income tax relief: company and investor procedures: investor claims: HMRC examining investors claim for tax reliefs

From HM Revenue & Customs · Venture Capital Schemes Manual

An investor cannot make a claim for tax reliefs if they have not received a form EIS3 from the company, or if, an investment was made through an HMRC approved knowledge-intensive investment fund, the company will issue form EIS3 to the fund manager instead, and the investor will receive a form EIS5 to make a claim for tax reliefs.

If an investor has received the EIS3 or EIS5 form after they have sent their Self-Assessment tax return to claim tax reliefs, they are required to complete Pages 3 and 4 of the EIS3 or EIS5 (the claim form) and send these to HMRC. An investor must retain page 1 of the EIS3 or EIS5 form (the certificate) in case HMRC may ask at a later stage to see the certificate to support their claim.

HMRC will consider the following where a claim, or a request for a current year adjustment is made:

  • was the claimant employed by the company, or a paid director of the company, at any time within the two years before the shares were issued. If so, report the facts to HMRC Venture Capital Reliefs (VCR) Team (see VCM2030) who authorised the issue of the form EIS3. The VCR Team will advise on whether the claimant is a qualifying individual

  • will the relief fall within the maximum amount allowed for the year in question, see VCM10530)

  • if the claim relates to shares which the claimant requires to be treated as issued in the previous year, will the total amount dealt with in this year be within the maximum allowed, see VCM14150

  • does the amount on which relief is claimed tally with the amount shown on the certificate, page 1 of the form EIS3 or form EIS5, and is the claim for the correct year

  • If page 1 of form EIS3, the certificate, shows that any value has been received from the company, has the amount on which relief is claimed been restricted accordingly (the company will have stated the amount on form EIS3)

If for any reason the claim falls to be refused, see VCM14180.