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EIS / SEIS

Enterprise Investment Scheme and Seed Enterprise Investment Schemes

The Enterprise Investment Scheme and Seed Enterprise Investment Schemes (S/ES) were brought in in 2012 to encourage individuals to invest in small companies. The scheme offers huge tax incentives for investing in S/EIS eligible companies compared with investing in larger and listed companies such as mainstream stocks and shares.
We list the main aspects of the schemes below and you can head to our blog for a more-in depth explanation.

Company Eligibility

  • There must be less than 250 employees for EIS, 25 for SEIS
  • The investment funds must be used within 2 years of the investment
  • The company must be an unquoted company with a permanent UK establishment
  • For SEIS investment, the trade must be in the preparation stage or less than 2 years old.
  • The maximum investment that can be raised via the two schemes is £5 million in 12 months for EIS or £150,000 in 3 years for SEIS
  • The gross assets of the company must be worth less than £16 million after the issue of the new shares for EIS, £250,000 for SEIS
  • The company must carry on a 'qualifying trade'. Most trades are eligible but the company must not be engaged in investment activities.

Investment Requirements

  • The investment must be for new shares
  • For less than or equal to 30% of the share capital in the company
  • The investor cannot have been an employee or director of the company before investment
  • In order to retain the tax incentive, the shares must be owned by the investor for 3 years or more

Tax Incentives for Investors

SEIS

  • The investor will receive a tax credit of 50% of the investment in their qualifying shares of up to £50,000 income tax each year
  • Once the shares have been retained for their qualifying 3 years, they are exempt from Capital Gains Tax-forever
  • There are opportunities to carry the capital gain into new investments to amplify the capital gain exemption
  • Qualifying shares are exempt from inheritance tax

EIS

  • The investor will receive a tax credit of 30% of the investment in their qualifying shares
  • Once the shares have been retained for their qualifying 3 years, they are exempt from Capital Gains Tax-forever
  • There are opportunities to carry the capital gain into new investments to amplify the capital gain
  • Qualifying shares are exempt from inheritance tax

How Can We Help?

If you need help understanding whether you can claim investment relief or want to know if S/EIS funding is the right move for you then just get in touch and we’ll help you make the most of your investment potentials.
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