Claiming EIS Loss Relief via Online Self Assessment

Ok, then can you tell me if I can enter my EIS related capital losses net of the EIS relief in box 41 please? Thanks

I have not yet needed to do this myself, but expect to need to do so in 2024-25, hence why I'm reading this thread... It is indeed frustrating that HMRC do not provide a simple example of filling in the form for the simple case of a personal investor in a few EIS companies. After much googling, my current understanding is that... Box 41 is the total amount of loss you are eligible to claim for. Do not apply any modification based on your marginal tax rate. The clearest supporting evidence for this I have found is the "Tax Calculation summary notes" (SA110 Notes), a document principally intended for people calculating their own tax due without computer support, but it specifically details how box 41 applies to the overall calculation. Box 42 is equal to box 41, according to the SA108 notes, unless you have other things to report besides EIS within the "Unlisted shares and securities" section. Box 32 (disposal proceeds) is defined in the SA108 notes as before relief, so we can be confident we're not supposed to make any modification for the relief here. Box 35 (losses) is defined in the SA108 notes as after any reliefs, so we can be confident the effect of the relief must already have been applied by the time we fill in this box. Box 33 (allowable costs (including purchase price)) is the harder to understand one - I feel it is probably intended that, despite it saying "including purchase price", it wants only the portion of the purchase price which was not already relieved by the 30% relief at time of purchase. This is a *guess*, driven by the use of the word "allowable" in the box name, and that if this was not the case, the formula "proceeds minus (allowable) costs equals loss" would not balance. The following third party site - xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx - that turned up in my googling appears to follow this logic.

Re-making my previous post, without the link that apparently got elided by moderation, and in the process deleted all the line breaks, making it hard to follow: I have not yet needed to do this myself, but expect to need to do so in 2024-25, hence why I'm reading this thread... It is indeed frustrating that HMRC do not provide a simple example of filling in the form for the simple case of a personal investor in a few EIS companies. After much googling, my current understanding is that... Box 41 is the total amount of loss you are eligible to claim for. Do not apply any modification based on your marginal tax rate. The clearest supporting evidence for this I have found is the "Tax Calculation summary notes" (SA110 Notes), a document principally intended for people calculating their own tax due without computer support, but it specifically details how box 41 applies to the overall calculation.
Box 42 is equal to box 41, according to the SA108 notes, unless you have other things to report besides EIS within the "Unlisted shares and securities" section. Box 32 (disposal proceeds) is defined in the SA108 notes as before relief, so we can be confident we're not supposed to make any modification for the relief here. Box 35 (losses) is defined in the SA108 notes as after any reliefs, so we can be confident the effect of the relief must already have been applied by the time we fill in this box. Box 33 (allowable costs (including purchase price)) is the harder to understand one - I feel it is probably intended that, despite it saying "including purchase price", it wants only the portion of the purchase price which was not already relieved by the 30% relief at time of purchase. This is a *guess*, driven by the use of the word "allowable" in the box name, and that if this was not the case, the formula "proceeds minus (allowable) costs equals loss" would not balance.

Hi ConfusedTaxpayer27,
EIS losses are entered in the unlisted shares and securities section of SA108 (Capital gains).  
If you are completing your tax return online, you would tailor your return to include the capital gains option (page 1 of 3) and tick unlisted shares and securities.  
Any EIS relief being claimed should be entered in box 2 on page Ai2 of SA101 (additonal information).
Thank you.

I don't understand why the forum repeatedly destroyed the paragraphs in my long posts above... I won't try again. If you're trying to read them, you might want to copy/paste elsewhere and insert a paragraph break before every sentence starting with "Box". Meanwhile, I've come across a key sentence in HS297 that confirms deducting relief from cost is the intended way to handle it: "In computing the loss, you must reduce the cost of your shares by the amount of any Income Tax relief given and not withdrawn."

Thanks @maxb for your help and sorry for the delay, I was on holiday. @HMRC Admin 20 I think you are talking about box 54 of SA108 CG4 'Any Other Information' or box 19 of SA100 page TR7. Box 2 on page Ai2 of SA101 is 'Subscription for EIS shares' on this year form. As my losses relate to companies going into administration in the 2024-25 tax year, should I also be filling box 3, 4 and 5 of the 'Other Information' part of page Ai3 of SA101 on the 2024 form with the same losses amount as the one put in boxes 35, 37, 41 and 42 of SA108 page CG2?

@ConfusedTaxpayer27 I'm confused why you're talking about the various end-of-form additional information boxes (SA108 box 54 and SA100 box 19)... I think Admin 20's three paragraphs simply: 1) Confirmed SA108 and the section containing the boxes we were previously talking about 2) Gave instructions on how to get to that same section when filing online, rather than using paper forms 3) Somewhat confusingly, then also brought up the box for EIS Income Tax relief on subscriptions, not losses. You've then introduced the additional complication of claiming against previous years... for which my reading of the situation means that you wouldn't be using boxes 41/42 at all, since they look specific to same-year claims to me, with box 43/44 being provided for carrying back to the previous year - and then you'd be completing SA108 in your 2024/25 return, not in your 2023/24 return.

@maxb Thanks for your explanation, I understand what Admin 20 meant now, your point 3 seems the right way to view the response. I wasn't asking about EIS relief on subscriptions, which are quite simple compared to losses. As for my question about claiming for 2023-24 for losses arising in 2024-25, this is because the companies are very likely to be dissolved when the time comes to fill my 24-25 form, so I'll let an official HMRC Admin respond about how to do it properly...

Hi ConfusedTaxpayer27,
No, your losses occured in the tax year 2024 to 2025 and should be declared in the tax return for 2024 to 2025, which will become available shortly after 6 April 2025, on SA108 for 2024 to 2025.
Thank you.

But is it ok to do it even if the companies are dissolved at the time of filling my 2024-25 return, which most will be by 6 April 2025? The (tricky) rule is that you must still own the shares at the time of filling your return, which is not considered to be the case once the company is dissolved.

Clarification needed. I will be making a NVC claim for my EIS investment. The company went into liquidation in July 2024. 1. With the liquidation being in July 2024 therefore falling into the 2024/25 tax year, can I wait until I complete my 2024/25 tax return to make the NVC. 2. I deferred CGT and want to use the lossfrom the NVC against the revived gain, again can I do this in my 2024/25 tax return. 3. I claimed income tax relief which I deduct from the loss; however, I have not held the shares for 3 years' and therefore they are not qualifying, do I need to pay the relief back now to avoid interest charges or do I just deduct the amount from NVC loss when I complete my 2024/25 tax return.

@ConfusedTaxpayer27 No, you don't have to still hold the shares at the time of filing the return to benefit from share loss relief. Source: HS286 "The loss must have been made on a disposal by way of one of the following: ... the dissolution of the company ...". Therefore shares held until the company is dissolved do count as a qualifying disposal. Furthermore, it makes things simpler if the company has actually been dissolved, as then you can simply claim for the actual loss - whereas if liquidation is ongoing, you have to make a Negligible Value Claim with appropriate evidence - https://www.gov.uk/guidance/negligible-value-agreements#negligible-value-claims-for-company-shares-and-securities which may not be trivial to collect.

@maxb So, if the company has gone into liquidation, you don't have to make a NVC? just a disposable loss? The 3rd post in this thread says "You would note it as a disposal with no funds received and claim the election of negligable value claim."

If you need the loss relief whilst the company is *in liquidation*, then you'd need to do a negligible value claim, and deal with the evidentiary requirements for that. (Or perhaps, the wording at https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13145 might imply that in some cases HMRC might be prepared to accept less evidence in some cases, but I have been unable to find a clear statement on that point.) But, if you can afford to wait for the loss relief until the liquidation finishes and the company is dissolved, that complexity goes away, and you are just reporting a concrete loss that has occurred - referring again to HS286 at https://www.gov.uk/government/publications/negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-hs286-self-assessment-he/hs286-negligible-value-claims-and-income-tax-losses-on-disposals-of-shares-you-have-subscribed-for-in-qualifying-trading-companies-2024 : "(share loss relief) — the disposal may be as a result of making a negligible value claim, but the relief is available for other types of disposal" providing a clear statement that share loss relief doesn't necessarily require a negligible value claim, if another allowed type of disposal (such as dissolution of the company) crystallises the loss instead.

@maxb You say "if you can afford to wait for the loss relief until the liquidation finishes", but what if we can't? It seems we can claim the losses the year before, as long as it's clearly reported in box 3 "Relief now for 2024-25 trade losses or certain capital losses" and box 5 "Tax year for which you’re claiming relief in box 3, for example, 2022–23 YYYY YY" of the SA101 form page Ai3. You seem to be a former HMRC inspector with good knowledge of how it works, but could someone from the official HMRC Admin actually confirm if it's allowed or not please? I'd like to send my return as soon as possible.

Hi ConfusedTaxpayer27,
Please refer to guidance here:
HS286 Negligible value claims and Income Tax losses on disposals of shares you have subscribed for in qualifying trading companies (2024)
Thank you.

Hi RVCO,
You can see guidance here:
HS286 Negligible value claims and Income Tax losses on disposals of shares you have subscribed for in qualifying trading companies (2024)
Thank you.

In my case the companies have been dissolved so I'm just going to put them down as disposable losses under unlisted shares. From HS286 You cannot make a negligible value claim after the company has been dissolved. If the company has been dissolved, then you are automatically treated as having made a disposal of the shares at the time the company was dissolved. You are no longer the owner of the shares after the company has been dissolved and so you cannot make a negligible value claim. A capital loss may result from a company in which you held shares being dissolved. You will need to make a calculation of that loss and send the calculation to us for the capital loss to be an allowable loss.

@ConfusedTaxpayer27 Thanks for the compliment, but I have no affiliation with HMRC whatsoever - I'm just an individual taxpayer who has spent entirely too much time dealing with my own affairs and my immediate family's :-) OK, so if it's financially important to obtain relief in 2023/24, I think you're looking at making a Negligible Value Claim. Before talking about that, though, let's talk about the "Relief now for 2024-25 trade losses or certain capital losses" box. The question is... is share loss relief a "certain capital loss"? I have been unable to find a good answer to this. What I did find is that someone claimed it was, was told they were wrong by HMRC, fought it in through the Upper Tribunal and the Court of Appeal being told no, but then the Supreme Court reversed the judgements of lower courts and said it was! https://www.supremecourt.uk/cases/uksc-2017-0127 Crikey. So that seems like a minefield. But here's the thing... you might not need to care about this because if you are going forward with a Negligible Value Claim, the NVC can create a "deemed" disposal for tax purposes at an earlier point in time ... provided the asset actually was of negligible value at that time. So, if you think you can show the shares were already of negligible value before 5th April 2024, you might be able to treat everything as happening in the 2023/24 tax year, significantly simplifying the form filling. As for actually making a NVC, though, I have been unable to locate clear instructions on how much evidence is necessary to prove negligible value - and what I have found online seems contradictory. For that, I fear you may need actual professional advice, unless you want to take a "try it and see" approach, and hope HMRC chooses to exercise the discretion described in https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13145 . I'm sorry I couldn't be more help - for my own affairs, I'm currently aiming to hold claims until companies are dissolved and claim only against my current year Income to avoid having to deal with much of this labyrinth.

Hi - I am looking at this as a complete novice. I have no other capital gains to report, am not self-employed. I have an EIS loss on shares at an original price of £3000. On the online self-assessment page "Details of chargeable assets disposed of and gains and losses", are these the correct answers? Did you dispose of chargeable assets worth more than £50,000? --- No Are losses deducted? --- Yes -- i.e. the EIS loss Are your total chargeable gains before deducting losses more than £6,000? -- No Do you want to claim an allowable capital loss or make any other capital gains claim or election for the year? -- Yes -- i.e. the EIS loss Thank you for your help! Lera