A company with advanced EIS approval has issued shares . The allotment date of these shares was 23/7 and issued 24/7. However funds for 2 of the people in this batch was received from them prior ie 1/5 and 6/7
I believe funds should be paid for the shares on the same day as issue. (Does it have to be the exact day of issue?)
As this has not happened would they be blocked in claiming EIS relief?
No benefit was paid to the people in respect of the funds held prior to issue. Delay was due to receiving back completed documents.
Is there any way to correct if it is blocked?
There is no requirement for the shares to be issued on the same day they are paid for, just that they must be fully paid up by the date of issue.
If the subscriptions were done under advance subscription agreements, HMRC will only consider these suitable for EIS where the agreement does not permit the amounts to be refunded, the agreement cannot be varied, cancelled or assigned and there is no interest or other benefit paid to the subscriber.
Provided these were amounts paid for subscription to the shares and not as loans in the first instance, then the fact there has been a delay between receipt of the funds and the issue of the shares does not on its own prevent them from being eligible for EIS.
It will be down to HMRC to make that determination on submission of the EIS1 compliance statement.
I've a client (who is a resident overseas) undertaking staircasing and a remortgage. The original buyers elected to pay stamp duty on the purchase and it is noted in the lease. I believe that SDLT is not payable on the staircasing because of the initial election under Schedule 9 of the Finance Act 2003 - it's not something I've had to consider before so I'd be grateful for your opinion.
Please let me know if you need anything further in order to consider this.
"Under "staircasing" - a purchaser of a part-share of a property has the choice between:
If a purchaser elects to pay SDLT on the market value, they are choosing to pay more SDLT "now" than strictly necessary, in order to avoid paying any SDLT in future when their share goes above 80% (when higher rates/bands may apply, and the property's market value is likely to have risen): they are paying now to save tax in future.
For many purchasers, obvious financial constraints imposed by market conditions may simply prevent them to not electing for the market value "now", or they may just choose to leave the SDLT question for another day!
In your client's case, if they initially opted to pay any SDLT on full market value, there is no SDLT consider on subsequent purchases of further shares."
How do I get more information on Tax Partner Pro or ETC Tax
If you have a question similar to the above or want to know more about our Tax Partner Pro membership please drop us an email mailto:enquiries@etctax.co.uk
Optimized by Seraphinite Accelerator
