Taxation of Chargeable Gains Act 1992 Schedule 5B paragraph 2

Postponement of original gain

Section 2 of Schedule 5B sets out how an investor can claim to defer a chargeable gain by setting it against qualifying expenditure on shares that qualify under the Enterprise Investment Scheme (EIS).

• An investor must make a claim to defer a chargeable gain, specifying the amount of unused qualifying expenditure on EIS shares to be set against the unmatched portion of the original gain.
• Where expenditure is successfully set against the gain, that portion of the gain is treated as though it never arose at the original time — effectively postponing the tax charge until a future chargeable event occurs in relation to the EIS shares.
• Qualifying expenditure is the amount the investor subscribed for the shares, and it counts as "unused" only if it has not already been claimed under this Schedule or under the equivalent SEIS re-investment relief rules in Schedule 5BB.
• The original gain is "unmatched" to the extent that no other expenditure — whether under this Schedule or Schedule 5BB — has already been set against it.