In Abingdon Health Limited v HMRC [2016] TC 05525, EIS relief was denied as shares acquired preferential rights on the issue of a new class of growth shares.

To qualify for EIS relief shares must not carry any present or future preferential right to the company’s assets on a winding up at the time of issue and for the next three years.

The First Tier Tribunal (FTT) agreed with HMRC that EIS relief was not available on any of the share issues:

Comment

Yet another demonstration of how you must be extremely careful when issuing new classes of shares or amending the Articles if you have claimed, or are intending to claim, EIS relief.

Links

EIS: Enterprise Investment Scheme
The Enterprise Investment Scheme (EIS) provides tax incentives in the form of an Income Tax and Capital Gains Tax (CGT) reliefs to investors who invest in smaller, unquoted, trading companies.

External links

Abingdon Health Limited v HMRC [2016] TC 05525