Personal Tax – EIS/ SEISS Relief (3 year) claim carry back. If collapsed/fails/clawback OR withdrawal/reduction

personal-tax-eis-seiss-relief-carry-back-to-prior-year-not-a-loss

Personal Tax – EIS/ SEISS Relief (3 year) claim carry back. If collapsed/fails/clawback OR withdrawal/reduction

18th February 2022

IRIS Personal Tax - EIS/ SEISS Relief (3 year) claim or carry back to prior year. (Not a loss) and if need Claw back in current year. Business Investment Relief claim or carry back to previous year (EIS/SEED)

NOTE: If this is an actual EIS/SEISS LOSS (not a Relief) then read this guide for EIS/SEIS loss carry back

IF the EIS collapsed/fails (Clawback) OR a EIS Relief Withdrawal/reduction– then read the very bottom of this KB

How to claim EIS/SEISS Relief to carry back to previous year:

1. Select the client and the year of the relief

2. Reliefs | Business investments | EIS or SEIS investment schemes.

3. If carrying back relief: Fill in details make sure the amount for the carryback box is filled and the amount for relief (both boxes) , and that the ‘for year end 5th April’ field has the tax year you want to be used or are carrying back to. (for example, if you are carrying back from 2021 to 2020 – then enter ‘2020’). The amount for relief must be equal or greater than amount to carryback (and vice versa, the carry back value cannot exceed the relief). This will omit the EIS relief from the Schedules of Data, the record will be kept in PT so you can keep track of these EIS relief carry backs. .

4. To carry back – change to the prior tax year you want to claim the relief against.

5. Reliefs | Business investments | EIS or SEIS investment schemes. Enter in the same information but leave the carryback amount field blank. The amount for relief (the amount carried back from the relief year) field will be what shows on the tax comp. ‘for year end 5th April’ should have the tax year you are carrying to. This will show on the Schedules of Data.

EIS/SEISS collapsed/fails (Clawback) needs to be paid back in current year For example: If there was EIS/VCT investment in the past, it then collapsed/fails and you need to claim that relief. PT doesn’t deal with these ‘clawbacks’, so you have three options listed below OR contact HMRC Support to request where they would want this clawback to show on the SA100.

1) You can enter this as a gain, and reduce it accordingly by the relief and enter a note for HMRC in additional information explaining this.

2) If there is no gain from the shares – then Cap assets/ Edit/Losses and info/additional info – declare it here and HMRC will then adjust tax calc once they receive tax return

3) If its a LOSS claim and you want to use it as relief – Dividends | capital assets | Other capital gains | Add – create the loss. Then go to Edit(next to file) | Losses and other information – enter the amount to offset in the share loss relief used against this year’s income field that is located in the ‘Losses’ and ‘Losses relating to SEIS and EIS Relief’. and then need to enter a note into additional information regarding that its a clawback. https://www.iris.co.uk/support/knowledgebase/kb/personal-tax-how-to-use-eis-share-loss-against-current-income-tax/

EIS/SEISS Withdrawal/Reduction of relief– Please read the HMRC rule link here so contact HMRC Support on this, as there is no dedicated box on the SA100 for this entry. If you decide to declare this on a SA100 – Reliefs/misc/ additional information – SA100 and add note here and ask HMRC to make any adjustments.

EIS/SEISS (& venture capital trusts) relief which is unused and want to be used against State pension lump sum tax deducted at source?- HMRC rules: As the State pension lump sum is not included in the income for the year and therefore does not contribute to income tax due, the relief cannot be claimed against the tax due for the state pension lumpsum