Is EIS Disposal Relief available in full in the following scenario?

Hi, In 2022-23 I have made more EIS-eligible investments than what's required to reduce my income tax liability to nil, therefore I cannot claim full EIS Income Tax relief for all off them. As I understand based on Venture Capital Schemes Manual VCM20060, if I claim a smaller amount of Income Tax relief for each investment, Full CGT Exemption will be available for each investment. Is this correct? As an example, let's say I've made EIS qualifying investments of £1000 each in 10 different companies (£10000 in total). Only £1000 worth of relief can be given before my Income Tax liability is reduced to nil (ITA07/S29(2)), so I elect to claim £100 in relief for each investment. Let's say each of the 10 investments will be sold at a profit after the Termination Date (so EIS relief is not withdrawn). Do I understand correctly that the restriction in TCGA92/S150A (3) does not apply, so the Full Capital Gain for each of the 10 investments will be CGT-exempt? Thank you.

Hi, Is someone able to answer this question please? Thanks.

Hi,

Your understanding of the overall position is correct, as confirmed in the following guidance:  

VCM20020 - EIS: disposal relief: CGT exemption

The guidance states "The investor may not be able to obtain Income Tax relief because their total income is too low or their income tax liability is reduced to nil by other reliefs. If the investor does not obtain any Income Tax relief on a subscription for shares in an EIS company there is no CGT exemption for those shares. CGT exemption is available if some Income Tax relief is given even though the effect of the claim is to reduce the investor’s Income Tax liability to nil"

The following guidance and associated links provide further information:

VCM20040 - EIS: disposal relief: Income Tax relief restricted
 
You can also see more information here: 

VCM14120 - Venture Capital Schemes: the Enterprise Investment Scheme: income tax relief: company procedures: attribution of EIS relief to shares

which states "Normally the amount of Income Tax relief attributable to a holding of shares will be self-evident. Where, however, the maximum amount on which relief is available for a year (see VCM10530) is exceeded, the position is not clear. In this situation the total relief obtained for the year is apportioned between all the holdings of shares for which relief was claimed, or the individual can choose to claim relief on some shares and not on others"

Thank you.