Investors in 2010 Approved Funds will not receive income tax relief in the 2008/9 tax year.  We have been approached recently by a few IFAs who are convinced otherwise. 

We decided to clarify (again) the situation with HMRC itself, and we received the following in reply:

“The carry back rules are contingent upon the date the shares are issued, rather than the date the Fund closes. Relief can be carried back to the year before the year in which the shares were issued, so it would only be if the shares were issued in the same tax year as that in which the Fund closed, that the relief could be carried back to the year before the year in which the Fund closed.  If the Fund closed on say, 5 April 2010 (2009/10) and the shares were issued on 6 April 2010 (2010/11) the relief could only go back to 2009/10, not to 2008/09.”

Longbow’s 2010 Approved EIS Fund will close on 5 April 2010 (applications must be in by Thursday 1st April to be safe) and will attract tax relief in the 2009/10 tax period as in the example above.

There is one final opportunity to receive tax relief in 2008/9, and that is to invest into the Arrowhead EIS Fund by 1 March.  Longbow will invest in a portfolio of 4-5 companies by 1 April.