EIS relief has been claimed in respect of the shares in a company which has been unsuccessful in developing a product. The company is facing liquidation and a shareholder has offered to buy the shares at 1p in the £. One tranche of shares was issued more than three years ago and another tranche was issued less than three years ago. What are the tax implications for the shareholders if they accept the offer for the shares or if the company goes into liquidation?
Answer
The enterprise investment scheme (EIS) is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who subscribe for new shares in those companies provided specific conditions are met by the issuing company and the investor (these...
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EIS relief has been claimed in respect of the shares in a company which has been unsuccessful in developing a product. The company is facing liquidation and a shareholder has offered to buy the shares at 1p in the £. One tranche of shares was issued more than three years ago and another tranche was issued less than three years ago. What are the tax implications for the shareholders if they accept the offer for the shares or if the company goes into liquidation?
Answer
The enterprise investment scheme (EIS) is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who subscribe for new shares in those companies provided specific conditions are met by the issuing company and the investor (these...
If you are not a subscriber, subscribe now to read this content.
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