Personal Tax- How to use EIS/SEIS Share loss (Negligible value) against current/last income tax?

personal-tax-how-to-use-eis-share-loss-against-current-income-tax

Personal Tax- How to use EIS/SEIS Share loss (Negligible value) against current/last income tax?

21st September 2021

IRIS Personal Tax- How to use EIS/SEIS Share loss against income tax? and EIS Negligible value claim

If you want to carry back a EIS share loss to past year then read this KB

EIS/SEED Investment relief claim is a different process – read this KB

To use EIS/SEIS share loss against current or last years income tax OR a EIS Negligible value claim (this relief will NOT be just against capital gains)

1.Load the client and the relevant year of loss

2. Edit, Capital assets, you must have an existing loss OR create the loss – So either a ‘Shareholding’ loss or an ‘Other Capital gain (OCG)’ and make a loss entry. Ensure the date of loss falls into the right tax year or no relief will show.

NOTE: Do not make a ‘manual’ EIS relief claim on each disposal using the ‘Claim relief’ button- read step 3) below on what to do

NOTE: You MUST enter it as a share loss or a OCG loss. If you only enter this loss under ‘Assets’ then this will trigger a error.

3. Edit, Capital assets,  Edit(next to file),  Losses and other information, make a double entry: Enter the loss value in a) ‘Share loss relief against this years income’ and again in b) ‘Share loss relief against this years income’ (you can see two identical fields which both need to be completed)

If you want to carry back to a prior year read this KB

4. Run the tax comp – it will show as a ‘Income Tax relief’ and not show as a change in values under the CG tax comp or only affect the CG tax due. It will only be used against income.

IF there is no loss entry then PT cannot process a ‘negligible value’ claim and we recommend you add this claim under the Reliefs/Misc/ ‘SA100 Additional Information’ for HMRC to read it (unless HMRC recommends this ‘negligible value’ to show on a specific box/page in the SA100).

I have EIS Relief claim AND current year CG losses to offset against CG gain? The total CG loss relief may show as being restricted by the EIS relief. This is because you are telling the PT system that out of ALL the total losses – some of it is part of a EIS relief claim – for example You have 20K CG losses, you then add in 7K EIS relief (by going to ‘losses and other information’ and adding the two entries) – it will then show as 13K loss relief and 7K EIS relief. Go to the Capital Assets – Edit | losses and other information and remove the amounts from ‘this year’s losses’ and ‘Losses relating to SEIS & EIS relief’ Once removed, this now offsets the whole CG loss against the ‘in year CG gain’ OR you keep it as it is.