Taxation of Chargeable Gains Act 1992 Schedule 5B paragraph 1

Application of Schedule

Schedule 5B paragraph 1 sets out the conditions under which an individual can defer a chargeable gain by making a qualifying investment under the Enterprise Investment Scheme (EIS).

• An individual with a chargeable gain arising on or after 29 November 1994 may defer that gain by subscribing for eligible shares in a qualifying EIS company within a specified time window
• The qualifying investment must meet strict conditions: shares must be subscribed for wholly in cash, fully paid up on issue, issued for genuine commercial purposes, and the company must not receive more than £5 million of relevant investments in the year ending on the date the shares are issued
• The shares must be issued within the period beginning one year before and ending three years after the gain accrues, although HMRC may extend these time limits
• The investor must be UK resident both when the gain arises and when the qualifying investment is made, and must not be treated as resident in another territory under a double taxation agreement in a way that would shield the EIS shares from UK capital gains tax