Income Tax Act 2007 section 211

Call options

Section 211 deals with the situation where an EIS investor grants a call option over their shares, treating this as a disposal that can trigger a withdrawal or reduction of EIS relief.

• If an investor grants an option that would oblige them to sell any of their EIS shares, this section applies
• Granting such a call option is treated as a disposal of the shares covered by the option, triggering the same consequences as an actual sale under the disposal of shares rules
• This means EIS income tax relief may be withdrawn or reduced, just as it would be if the investor had sold the shares outright
• This section operates independently of, and does not override, the separate requirement that there must be no pre-arranged exits from the investment