ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL Although this change in principle affects the timing of relief and could be favourable to some taxpayers and adverse to others, it is entirely in line with current practice and so will have no practical effect.
Change 36: EIS: claim in respect of less than the total number of shares, on which claimant is eligible for EIS relief, in a single issue: sections 158, 201, 210, 218, 219, 220, 226, 227, 228 and 229
This change provides that, in relation to a single issue of shares, an individual may claim EIS relief in respect of fewer than the total number of shares in respect of which the individual is eligible for relief (see Change 37 for cases where there is a cap on the EIS relief). The change also makes it clear what happens if there are multiple issues of shares.
There are consequential changes to deal with any recovery of relief in cases where an individual makes a restricted claim.
Section 289A of ICTA says:
“(1)Where an individual eligible for relief in respect of any amount subscribed for eligible shares makes a claim, then, subject to the following provisions of this Chapter, the amount of his liability for the year of assessment in which the shares were issued (“the current year”) to income tax on his total income shall be the following amount.(2)That amount is the amount to which he would be so liable apart from this section less whichever is the smaller of-(a)an amount equal to tax at the lower rate for the current year on the amount or, as the case may be, the aggregate of the amounts subscribed for eligible shares issued in that year in respect of which he is eligible for relief, and(b)the amount which reduces his liability to nil.”
Those two subsections are silent on whether an individual, who is eligible for relief on more than one issue of shares, can claim relief in relation to one issue but not the other one (multiple issues). The subsections are also silent on whether, in relation to a single issue of shares, a restricted claim may be made (restricted claims).