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EIS CGT deferral

EIS CGT deferral

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My client realised a large capital gain in 2015/16 as a result of the disposal of some land. In the same year he undertook an EIS investment and the capital gain was deferred as part of the EIS claim. The EIS shares have now been sold during the current year resulting in a significant capital loss.

As a result of the share disposal the deferred gain will now come back into charge during this year. However, since 2015/16 he has accumulated some fairly large capital losses and, of course, he has the loss (after deduction of income tax relief given) on the EIS shares disposed of. Is there any reason why the brought forward losses and the EIS capital loss itself cannot be offset against the deferred gain now brought back into charge?

The reason I ask is that all the advice I have read on this subject indicates that the annual allowance is available to offset but does not go any further.

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By Wanderer
28th Jan 2021 10:13

Looks good to me!

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By Tax Dragon
28th Jan 2021 10:16

When advice you read fails you*, look up the legislation. (*You don't have to wait till then.)

It's paras 4 and 5 Sch 5B TCGA 1992.

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