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Offsetting a Capital Gains Tax Bill
Hawker74
Posts: 1 Newbie
In this financial year I incurred a capital gain through the sale of a business. I was lucky to qualify for Entreprenerial relief but I am still expecting a tax bill of around £30,000 for the 17/18 tax year, which I understand I will need to settle in January 19.
I have recently had my head turned by SEIE and VCTs. I understand with one of these schemes I can claim up to 30% releif if I inevest and abide by the rules of the scheme for 3 years?
Is it that simple? If I invested say £90,000 would my cap gains tax bill be lowered by £27k?
If so, do I have to make the investment this year or could I make it in 18/19 ?
Where do I find a list of investments? I'm not a novice investor and mange my own ISA and SIPP portfolio with HL
Thanks in advance.
I have recently had my head turned by SEIE and VCTs. I understand with one of these schemes I can claim up to 30% releif if I inevest and abide by the rules of the scheme for 3 years?
Is it that simple? If I invested say £90,000 would my cap gains tax bill be lowered by £27k?
If so, do I have to make the investment this year or could I make it in 18/19 ?
Where do I find a list of investments? I'm not a novice investor and mange my own ISA and SIPP portfolio with HL
Thanks in advance.
0
Comments
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Sorry nobody in this sub-forum has been able to help you on this query. You may do better asking on either the main Savings & Investments or Cutting Tax forums.0
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You could invest in a Seed Enterprise Investment Scheme (SEIS) Fund and reduce your CGT bill by 50% through 'Reinvestment Relief' - more info on HMRC website.
Or you could invest in an Enterprise Investment Scheme Fund - which allows you defer paying the CGT amount invested l for the life of the investment.
List of SEIS/EIS providers on the EISA website.
I have a few favourites, but I'll let you decide.0 -
That's my understanding too. For example search: "SEIS Reinvestment Relief".
"When you dispose of an asset and make a gain you usually pay Capital Gains Tax for the tax year in which you dispose of the asset. Reinvestment relief lets you treat 50% of a gain arising in tax year 2014 to 2015 as exempt from Capital Gains Tax if you acquire SEIS shares."
So if you made an SEIS qualifying investment in the 2018/19 tax year you would be able to claim 50% CGT "reinvestment relief" for the 2017/18 tax year, if I've understood it correctly around £15k in your case (you don't get the reliefs automatically you have to claim e.g. via your tax return). So this isn't something you need to rush to do before the end of March AFAIK.
I'm not sure whether you can claim reinvestment relief on EIS investments, maybe only higher risk SEIS.
These types of investments are quite specialised and higher risk (e.g. liquidity) than investing in listed shares so definitely worth learning more about them and/or getting advice before jumping in.0
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