Section A

Victor realized a capital gain of £50,000 on the sale of a buy-to-let property. He wishes to defer this gain by investing in Enterprise Investment Scheme (EIS) shares. What is the time limit for making the EIS reinvestment to qualify for CGT deferral relief?

Answer options:

1 year before or 1 year after the date of disposal of the property.

1 year before or 3 years after the date of disposal of the property.

3 years before or 1 year after the date of disposal of the property.

Within the same tax year as the disposal.

How to approach this question

Memorize the specific time windows for different reliefs. EIS deferral is 1 year before to 3 years after.

Full Answer

B.1 year before or 3 years after the date of disposal of the property.✓ Correct

To qualify for CGT deferral relief under the Enterprise Investment Scheme (EIS), the reinvestment into EIS shares must take place within the period beginning 1 year before and ending 3 years after the date of the disposal that generated the gain.

Common mistakes

Confusing the EIS deferral time limit with the standard business asset rollover relief time limit (1 year before to 3 years after is actually the same for both, but option C reversed it).

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