ACCA Advanced Taxation (ATX) Practice Exam

True or False: EIS deferral and SEIS reinvestment can be claimed on the same expenditure.

1. True

2. False

3. Depends on individual circumstances

4. Only for small amounts

The correct answer is: False

The statement that EIS (Enterprise Investment Scheme) deferral and SEIS (Seed Enterprise Investment Scheme) reinvestment can be claimed on the same expenditure is false. To clarify, EIS and SEIS are two distinct tax relief schemes designed to encourage investment in small and startup companies. When a taxpayer invests in a company under EIS, they can defer capital gains and potentially benefit from a range of other tax reliefs. In contrast, SEIS is targeted specifically at very early-stage companies and offers different tax advantages, including an income tax relief on the investment amount and capital gains reinvestment relief. These two schemes have particular eligibility requirements and are not designed to be claimed simultaneously on the same investment or expenditure. Each scheme has unique benefits aimed at different stages of investment, meaning that they cannot overlap for the same expenditure. Therefore, while both schemes aim to promote investment, they operate under separate rules that prevent claiming both on one expenditure, leading to the determination that the original statement is false.