SEED ENTERPRISE INVESTMENT SCHEME (SEIS)

Tax Reliefs

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Income tax relief at a rate of 50% of the amount invested. This is subject to a maximum investment of £100,000 per year (in all SEIS companies).

The shares are subject to a Capital Gains Tax exemption where the SEIS shares are sold after 3 years or more of ownership (as for EIS).

A further Capital Gains Tax exemption is available where you re-invest any gain made from the sale of an asset into SEIS shares. For 2012/13 100% of the amount re-invested is exempt from CGT and for 2013/14 it is 50% of the amount re-invested.

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Individuals Who Qualify For Tax Relief

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Directors can qualify, but current employees cannot. Previous employees do qualify.

The individual cannot be connected to the company, in broad terms this means owning less than 30% of the company.

The SEIS Company

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The maximum that can be raised through SEIS is £150,000 in total (not an annual limit). The assets of the company must not exceed £200,000 before the issue of the SEIS shares.

The company must have fewer than 25 full time employees (or equivalent part-timers) immediately before the shares are issued.

The company must be carrying out a qualifying trade. The trade must have been carried out for less than 2 years, whether that was through the company or as an individual.

Companies with subsidiaries can qualify.

There are a number of anti-avoidance rules in place, which are largely derived from the EIS rules.

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How We Can Help You

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We can advise you on all aspects of qualification for both income tax and capital gains tax reliefs for SEIS investments.