Tax relief with EIS share

to read up on eis read this EIS 

However, based on the limited info you've given so far, I expect the answer to be no, double no, and triple no. 

That's not what EIS is for.  You can't.

Hello,

I invested a large amount of my money in Pelatro 2 years ago when I bought at peak (80p). Now the stock is worth about half as much and they're planning to do another share placing. I'm expecting another drop soon. 

Something that would soften the blow is something I saw from their RNS:

polaris.brighterir.com/public/pelatro/news/rns/story/x49d7kw

I'm not clear how AIM works and even less how to qualify to EIS?


Is my current share bought in LSE 2 years ago already qualifying to the tax relief?

Or should I sell my current share and buy them back (but how?) somewhere benefiting from the EIS tax break?




I don't know anything about Pelatro. But after I read your post first time I thought it strange that a company that enters AIM should be eligible for EIS. EIS provides seed/growth funding for start-ups, AIM is a stock market for small and medium size businesses, many of which probably got EIS when they were young. 

So I read your paragraph above again. It looks like Pelatro got EIS (and/or VCT) status in the past. In that case you should check their EIS status, get the certificate and see if you can still claim the tax relief (you need the registration number from the certificate and perhaps some more info for your tax return;  HMRC can also ask you for the certificate if it pleases them); if you bought 2 years ago, claiming relief may not be possible anymore. I am pretty sure one can claim one year back; 2 years I don't know. The tax hotline (HMRC) should be able to tell you. 

I also now suspect your current shares get automatically converted into ("be admitted to") AIM shares. In that case you could trade them at the AIM, the ones you currently hold would probably be hard to sell anywhere. It is possible that you have to do something to convert the shares. I also don't know what trading the shares at AIM would mean to any previous EIS tax reliefs. The three year minimum holding time may still apply.

Probably need to read the RNS but seems to me that it is issuing both new general equity & EIS/VCT shares. Pelatro appears to already be AIM listed, this is not an entry onto the exchange but an admission of additional shares.


"Conditional Placing to raise £2.15 million through the issue of 5,375,000 New Ordinary Shares at the Issue Price of 40 pence per New Ordinary Share



· Approximately £0.68 million raised through the placing of EIS/VCT Placing Shares and approximately £1.47 million through the placing of General Placing Shares"

AIUI Shares listed on AIM do qualify for EIS as  HMRC does not consider companies on AIM as quoted companies for this purpose. 

AIM EIS

The OP may be able to claim EIS on his shares but I note that not all shares are EIS eligible (there was a previous placing last year where only some were EIS eligible) Probably needs to get advice from either Pelatro investor relations or his broker on what type of shares he holds and whether they are eligible or convertible