EIS Relief for new company

EIS Relief for new company

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A client wants to set up a company for the purpose of buying a share option in another unrelated trading company.

There will be an initial payment of £125k (non refundable) with the balance of £500k payable over the next 15 years.

The new company can fund the purchase either by directors loans or by selling shares to the directors. No individual director will own more than 20% of the new company.

Is there anyway that the shares could qualify for EIS relief or another form of tax relief ?

I suspect not because the new company is not trading as it sole purpose is to acquire a controlling interest in another unrelated trading company. 

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By Paul Soper
13th Jun 2013 18:21

No

Seems remarkably substantial a payment for a 15 year option, presumably done with the intention of claiming loss relief on the shares in the company purchasing the option if the option is not taken up.

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By User deleted
14th Jun 2013 19:54

eis relief

it is effectively a deposit on the shares. If however the balance is not paid within the 15 years then the purchaser loses all rights to the shares.

Am I right in thinking that there is no effective way off getting immediate tax relief on the initial payment of £125k 

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