EIS reinvestment relief illustration

In this lesson

1. 0:00 EIS Reinvestment Relief Introduction
2. 0:27 Calculating Chargeable Gain 2020
3. 1:47 Deferred Gain Becomes Chargeable 2025

About this lesson

You'll see why the flexibility of this relief matters: you can choose how much relief to claim, which lets you preserve your annual exemption rather than waste it. This is a core ATX (Advanced Taxation) concept that appears regularly in exam questions about deferral reliefs and chargeable gains. The illustration walks through a real scenario: selling an investment asset for a £93,000 gain, immediately reinvesting £98,000 in EIS shares, then selling those shares three years later. You'll learn how to split the tax treatment across two tax years—deferring part of the original gain in the year of reinvestment, then bringing both the deferred gain and the new EIS share gain into charge when you dispose of the shares. The key technique is recognising that EIS reinvestment relief is capped at the lower of the gain or the amount reinvested, but you can claim less to optimise your tax position.

Duration: 2m