In terms of income tax, how should a person approach a loan for EIS shares?

When dealing with a loan taken out to acquire shares under the Enterprise Investment Scheme (EIS), it is essential to understand how the tax implications work. The appropriate treatment of such a loan for income tax purposes involves recognizing that loans specifically to purchase EIS shares are typically considered non-deductible expenses. This means that the individual cannot claim the interest on the loan as a deductible expense against their income.

The nature of EIS is that it provides certain tax reliefs, such as income tax relief on the investment made in EIS qualifying companies, but the loan itself does not alter the individual's taxable income. Therefore, the loan taken out does not generate reporting as income nor qualifies for a relief on its own if the shares are sold later. Instead, the focus remains on the direct investment's performance and the associated tax reliefs rather than the financing method used to obtain that investment.

Thus, when considering a loan for EIS shares, the most accurate approach from a tax perspective is to regard that loan as a non-deductible element, leading to the conclusion that option B is the appropriate answer.