In Kaljinder Singh Kalay v HMRC [2024] TC9155 an EIS investor’s attempt to persuade the FTT to allow a late claim for Income Tax relief to effect CGT relief on an £8m disposal failed. The tribunal had no jurisdiction to allow the late claim.

  • Mr Kalay purchased shares in a company under the Enterprise Investment Scheme (EIS) in 2013-14.
  • In order to qualify for Capital Gains Tax (CGT) relief on the later disposal of his shares, the rules are that a claim must be made for Income Tax relief on then investment.
  • The time limit to make that claim was no later than the fifth anniversary of the normal self-assessment filing date for the tax year of in which the shares were issued.
  • He sold his shareholding on 12 November 2019 and submitted his tax return for the tax year ending on 5 April 2020 included a claim for CGT EIS disposal relief of  £8,281,189
  • Over a year later 28 January 2022, it was realised that there was a problem. His agent made a Late Claim for EIS Income Tax relief for the 2012-13 tax year.

HMRC opened an enquiry into his Self Assessment return and denied relief on the basis that the claim was made out of time.

On appeal to the First Tier Tribunal(FTT), the tribunal confirmed that it had no jurisdiction to extend the claim the time limit and struck out the claim. Further it had no jurisdiction over HMRC’s exercise of their care and management powers. Nothing could be done.

The late Income Tax relief claim was dismissed and CGT relief was denied.

Useful guides on this topic

Enterprise Investment Scheme (EIS)
When can EIS relief be claimed?  What are the conditions for EIS relief?  What are the benefits of EIS relief?

Time Limits: claims, amendments and elections
What are the time limits for claiming a tax refund? How far can HMRC go back and raise an assessment? How many years back can a taxpayer appeal? What are the time limits for correcting a tax return?

External links

Kaljinder Singh Kalay v HMRC [2024] TC9155