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Quick Connected Persons Question

EIS Relief Connected Persons

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I'm currently trying to calculate the maximum amount a family can invest in an EIS company without breaching the 30% connected persons ownership threshold.  From what I can tell from:

https://www.gov.uk/hmrc-internal-manuals/company-taxation-manual/ctm60150 

The spouse of a child is not a connected person.  Am I correct?

The reason I want to double check is that the flowchart of Capital Gains indicates that the spouse of a child IS a connected person:  http://www.hmrc.gov.uk/gds/cg/images/cg14580flowchart.gif

Is it just that Capital Gains and EIS use different definitions of "Connected Person" and I'm overthinking this or is CTM60150 misleading?

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By The Dullard
19th Jul 2021 17:05

For EIS purposes, it does not matter if individuals are connected with one another. It matters if they are each other's "associates". The definition of associates in ITA 2007, s 253 does not include spouses or civil partners of relatives in the same way that the definition of connected persons does in TCGA 1992, s 286. Go figure!

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Replying to The Dullard:
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By Jdopus
20th Jul 2021 10:30

Thanks Dullard, appreciate it. Sometimes when I read the published guidance and tax legislation it makes me start doubting things that I was certain I knew.

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By Duggimon
20th Jul 2021 15:23

Worth using the VCM manuals for a better run down of what the terms mean specifically to EIS, the relevant one is here: https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/...

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