I am a 75 years old retired ex-executive, and have been retired since 2002. In February 2005, I participated in an EIS scheme (on the advice of an IFA), which invested in a group of London pubs. I bought 20,000 50p shares at £1 per share and received some tax relief as a result. The group was well managed, but no dividends were ever paid out and the value of the pub properties fell sharply in 2008. The pub chain has now been sold on and I have been paid £19,507 in March 2014. My question is do I have to declare this to HMRC in my tax return, and will I have to pay any tax?

Arthur Weller replies:
From your question it appears that you paid £20,000 for the shares and sold them for £19,507 making a capital loss of £493. If you look at HMRC’s venture capital manual at pages VCM20100 and 20110, you can see that an investor can claim the loss on the disposal of EIS shares. However, the loss claimed must be reduced by the amount of Income tax relief claimed. Since your capital loss is only £493, I would imagine that this is less than your original income tax relief.