Income Tax Act 2007 section 228

Single issue treated as made partly in previous tax year

Section 228 deals with how to calculate the reduction in EIS relief when a repayment of share capital has been made to other persons, and the original share issue has been split across two tax years for relief purposes.

• This section applies where EIS relief is being reduced because of repayments of share capital to others, and part of the share issue was treated as made in the previous tax year for relief purposes.
• The repayment amount must be split between the two tax years in proportion to the amount of EIS relief obtained in each year.
• For each tax year, a separate reduction calculation is performed as if there had been independent share issues in each year, applying the maximum relief rules where relevant but ignoring the multiple-issue and multiple-investor rules.
• The two resulting reduction amounts are then added together to give the total amount by which EIS relief is reduced.