Investor Relief GCT EMI 2024 Tax Year

jahudson72

Hi there, hoping someone can help. I was awarded some EMI shares in November 2021. The company went through a transaction in February 2024. I rolled my EMI shares into the new structure and they became ordinary shares. I was advised to claim the 10% on the disposal of shares as when the company sells again this will be 20%. I duly did this and now HMRC are saying that I have to pay 20%. I have not received any cash in relation to the disposal of the shares, I just believed I was paying the 10% upfront. This is not an insignificant amount of cash, I had to find the 10% but I do not have the other 10% just lying around. Is HMRC correct and do I have the option to not pay anything until I dispose of the shares at 20%? Any advice appreciated.

mybestattempt

jahudson72 said:

Hi there, hoping someone can help. I was awarded some EMI shares in November 2021. The company went through a transaction in February 2024. I rolled my EMI shares into the new structure and they became ordinary shares. I was advised to claim the 10% on the disposal of shares as when the company sells again this will be 20%. I duly did this and now HMRC are saying that I have to pay 20%. I have not received any cash in relation to the disposal of the shares, I just believed I was paying the 10% upfront. This is not an insignificant amount of cash, I had to find the 10% but I do not have the other 10% just lying around. Is HMRC correct and do I have the option to not pay anything until I dispose of the shares at 20%? Any advice appreciated.

Given these were EMI shares I think you may be referring to BADR (business asset disposal relief) which you claimed against the capital gain in 2023/24.

It is possible HMRC take the view that the shares had lost EMI status because of the company transaction in February 2024.

HMRC must surely have explained to you why they take the view that the capital gain did not qualify for investor relief or BADR, what have they said?