Q. I recently made an investment of £100,000 under the Seed Enterprise Investment Scheme. However, as I don't have much income in the current tax year, I am going to make a carry back claim. I’ve read that there is a 50% CGT exemption available. Should I sell some of my listed share portfolio to take advantage of this?
A: Unlike the main EIS, the Seed EIS exemption can only be matched to gains made in the year that the shares are acquired or treated as acquired, i.e., the year the income tax relief will be effective. If you make a carry back claim you will only be able to match the investment to gains made in 2020/21, so selling shares to generate gains won't work. You'll need to compare the overall relief using a carry back claim against not doing so and triggering gains to utilise the exemption.
Further information about the Seed Enterprise Investment Scheme can be found here.
The information provided in this blog is for general informational purposes only and should not be considered professional advice. As far as we are aware, the content is accurate at time of publication. Torgersens assumes no responsibility for errors or omissions in the content or for any actions taken based on the information provided.
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