EIS deferral relief - checking on the procedure

Just checking on the correct procedure as I've heard nothing from HMRC (no surprise)

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Hi all,

Client made an EIS subscription during 2022/23. Claimed 2022/23 income tax relief on this via her 2022/23 Tax Return.

Is also claiming CGT EIS deferall relief in connection with a chargeable gain made within the previous three years (2020/21). This was NOT claimed on the 2022/23 Tax Return, but was instead claimed by completing and signing the EIS 3 (pages 3 and 4) and sending it under cover of a letter to HMRC. This was done in Jan 2024.

Haven't heard anything from HMRC, and am just sense-checking that the correct procedure was followed, or if there is/was any different way of doing this? Or is it just HMRC being really behind with their post?

Thanks.

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By pauld
20th Jun 2024 12:02

All sounds correct to me but as the claim had to be made by post I would expect to wait up to a couple of years before a reply is received............I would keep checking clients HMRC's account to see if any credits added equal to CGT refund which I assume was paid 31 Jan 22.

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Replying to pauld:
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By Software Seeker
24th Jun 2024 16:05

Thanks for your reply; makes sense.

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By More unearned luck
24th Jun 2024 20:24

I have a related question, which is if the OP's client had been deferring a 2022/23 gain, how should he or she gone about it*?

HMRC say at VCSM23200 "The investor must use the claim form and complete the declaration when making a claim for EIS deferral relief..." This implies that s 42(2) TMA 1970 is disapplied, but by what provision? HMRC continue "... whether the claim is made in the Self-Assessment tax return or separately..." So it seems that claimants must, in order to make a correct self-assessment, claim relief twice: once on the EIS3 form and secondly within the return (which presumably means the return in the Cotter sense of a box that is used by HMRC's algorithm to compute the sum in box 1 or box 2 on page TC1). I can see that sometimes a claim must be made twice**, but does that apply to deferral relief claims? And if it does why does it?

*Assuming that the EIS3 certificate was held at the time the return was filed and that the return was filed in response to an NTF.
**eg a CGT holdover relief claim which requires the donee to join in the claim.

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