ACCA Advanced Taxation (ATX) Practice Exam

What is the maximum time frame after a disposal within which a claim for CGT EIS or SEIS can be made?

1. 3 years

2. 4 years

3. 5 years

4. 7 years

The correct answer is: 5 years

The maximum time frame within which a claim for Capital Gains Tax (CGT) relief under the Enterprise Investment Scheme (EIS) or Seed Enterprise Investment Scheme (SEIS) can be made is indeed 5 years after the disposal of the shares. This time frame is significant because it provides individuals the opportunity to make retrospective claims for relief on investments they made under these schemes. The specific legislation outlines that claims must be submitted within this 5-year window to ensure that the relief is granted for investments that are eligible. This 5-year period is designed to accommodate the complexities that may arise after a share disposal, allowing for the accuracy of claims and ensuring that investors can adequately gather the necessary evidence to support their claims. In the case of EIS and SEIS, which are designed to promote investment in smaller, higher-risk companies, the relief can significantly impact an investor's tax liability, hence the importance of the stipulated time frame. Understanding this period is crucial for taxpayers who wish to maximize their tax efficiency by utilizing the investment reliefs afforded by these schemes.