Our Partners, TaxScouts, have provided the following information on Loss Relief:
If the EIS business fails, you’ll receive loss relief, which acts as added protection when buying riskier shares.
EIS loss relief is a type of relief available when you sell your shares at a loss. This means that you sold your original shares for less than what you bought them for. Because you lost money from your investment in an EIS company, you’re eligible for tax relief. Tax relief allows you to reduce the amount of tax you pay the government.
To qualify for EIS loss relief, the initial value of the investment should be less than its effective cost when it’s sold. Effective cost is the total amount invested subtracted by the amount previously claimed in income tax relief.
Claiming your EIS loss relief is, luckily, a relatively simple process. You can claim your EIS loss relief as part of your Self Assessment tax return, by claiming the losses against either Income Tax or Capital Gains Tax.
If you have any questions or wish to find out more, please head to TaxScouts Help Centre.