Income Tax Act 2007 section 234

Relief subsequently found not to have been due

Section 234 deals with the withdrawal of Enterprise Investment Scheme (EIS) income tax relief where it is subsequently discovered that the relief was not properly due, and sets out procedural safeguards that must be satisfied before certain grounds can be used to withdraw that relief.

• Any EIS relief that an investor obtained which is later found not to have been due must be withdrawn.
• Relief cannot be withdrawn on the grounds that the purpose of the issue or use of money raised requirements were not met, or that the issuing company was not a qualifying company, unless specific procedural conditions are satisfied.
• Those procedural conditions require either that the issuing company has itself reported the problem to HMRC, or that an HMRC officer has formally notified the company of their opinion that relief was not due.
• The relevant issue of shares means the entire issue of shares by the issuing company that includes the particular shares for which relief is in question.