EIS investment has become ineligible for relief

In a recent tax year I made several EIS investments that brought my income tax liability down to zero. One of these EIS investments has since become ineligible for relief (within the first 3 years). Even without this EIS investment my EIS relief is greater than my income tax liability for the year in question, so there should be no income tax to pay, however I would like to understand the following: 1) How should I inform HRMC that the EIS investment is no longer eligible for relief? 2) Does my effective cost of the remaining EIS investments change? As my total EIS relief was greater than my income tax liability I didn’t receive the full 30% relief, and as such the effective cost of my EIS investments was > 70%. This effective cost is important as should subsequent EIS investments fail, the effective cost can be offset against CGT or Income Tax. Does my effective cost of the remaining investments change (increase) now that one of the EIS investments in that tax year is no longer eligible? Many thanks

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

Hi, I don't think this fact sheet addresses either of my questions. Please could you take another look. Thank you

I am also in the position of needing to notify HMRC of this, though without the complication of relief exceeding tax due in my case. HMRC webchat informed me that the only way to make the statutory notification was by post to BX9 1AS. I think that's the answer to your point 1). Though which I have heard nothing back 5 weeks later... I have no direct experience re your point 2), but to me it seems only natural and logical, that if you have relief withdrawn, yet are not required to pay any additional sum to HMRC because other previously capped relief is now partially uncapped, then the effective cost of the investment becoming ineligible has increased, and the collective effective cost of the remaining investments attracting relief has decreased by the same amount.

Hi ,
 

If one of your investments has failed then this is then the negligable value that the previus reply link refers to. You cannot use this as a cost to set against subsequent investments. If you need further guidance after referring again to the link, you should call 0300 200 3310 . Thank you .

Hi, 
 

Please contact the IHT team on 0300 123 1072 . Thank you .