Income Tax Act 2007 section 212

Put options

Section 212 deals with the withdrawal of EIS relief where a put option is granted to an investor during period A that would oblige someone to buy back the relevant shares.

• If anyone grants the investor an option during period A that would require the grantor to purchase any of the relevant shares, EIS relief must be withdrawn
• The withdrawal applies to all EIS relief attributable to the shares to which the put option relates
• The shares affected are determined by assuming the option was exercised immediately after it was granted
• Any shares in the issuing company acquired by the investor after the grant date are treated as disposed of immediately, so they are excluded from the put option calculation