Introduced by the Finance Act 2012, the Seed Enterprise Investment Scheme (‘SEIS’) was set up to encourage investment into smaller and start-up businesses. As these types of businesses inherently carry more risk than other investments, generous tax reliefs have been made available to investors SEIS can facilitate the provision of much needed capital to young companies enabling them to grow.

Tax Reliefs include:

  • Income tax relief of 50%
  • 50% Capital Gains Tax (‘CGT’) exemption (14% of the 28% CGT rate may be written-off)
  • SEIS shares qualify for Business Property Relief, and so fall outside of the estate after holding the shares for a minimum of 2 years at the time of death and therefore are not subjected to Inheritance Tax.
  • Loss Relief – Investing in SEIS is higher risk, and in the event of any write-offs investors may claim further tax mitigation (the original amount less the 50% income tax relief).

To see a summary of the main tax reliefs of SEIS please click here reliefs.

The specifics that relate to the recipient company include:

  • A total of £150,000 is the maximum available per investee company
  • The company must not have already raised cash through EIS or VCT
  • The company musthave traded for less than 2 years
  • The company must have fewer than 25 employees
  • The company must have gross assets of less than £200,000

Watch highlights from our latest Seed Enterprise Investment Webinar…