Income Tax Act 2007 section 238

Cases where assessment not to be made

Section 238 sets out two circumstances in which HMRC cannot make an assessment to withdraw or reduce Enterprise Investment Scheme (EIS) relief on shares held by an individual.

• No assessment to withdraw or reduce EIS relief may be made because of any event occurring after the shareholder's death.
• Once a shareholder has disposed of all relevant shares through arm's length transactions, subsequent events generally cannot trigger withdrawal of relief.
• Relevant shares are those issued to the individual by the company that either carry EIS relief or are still within period A (the compliance period).
• The protection from assessment after disposal of all shares does not apply if the individual is connected with the issuing company at the time the subsequent event occurs.