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EIS transfer

09 April 2013
Issue: 4397 / Categories: Forum & Feedback , Capital Gains

A higher-rate taxpayer holds substantial investments within the enterprise investment scheme, which have benefited from income tax relief and capital gains tax deferral relief

Our client has substantial enterprise investment scheme (EIS) investments on which he has claimed income tax relief and deferral relief against realised capital gains.

He is a higher-rate taxpayer but his wife is a basic-rate taxpayer. When the EIS investment is sold capital gains tax will be payable at the rate in force at that time.

Our client may be able to postpone sale until after he retires when he will become a basic-rate taxpayer and assuming the continuation of tax rates at today’s level a part of the gain on disposal may then be taxed at 18% before the higher rate applies.

The question arises as to whether our client may transfer an EIS investment to his wife without precipitating an immediate capital gains tax or income tax liability.

The plan being that in the event of a subsequent sale the wife’s capital...

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Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

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