How does EIS capital gains tax deferral relief work, and how do investors claim it?

EIS capital gains deferral relief allows investors to defer capital gains tax on gains used to fund an EIS investment. The mechanism works differently depending on timing:

**Key points:** - Capital gains that you *use to invest* in an EIS can be deferred. If you've already paid CGT on a gain before investing, reclaiming it requires accountant advice on the best approach. - Gains *made on the EIS investment itself* are CGT-free—there's nothing to offset against other gains or losses elsewhere. - Income tax relief (a separate benefit) is claimed in the year of investment or the year before, through the EIS3 certificate form and your tax return. - Capital gains deferral relief is claimed in the same way as income tax relief: via the **EIS3 form** on your tax return.

**Recommendations:** - Use a tax agent rather than applying yourself; it's too easy to get wrong. **Seed Legal** was mentioned as a recommended provider. - This is ultimately an accountant question—the specifics of reclaiming already-paid CGT depend on individual circumstances, so confirm with your tax adviser.

**Caveat:** Members emphasised this is not DIY territory and stressed the importance of professional support to avoid errors.