Seed EIS EIS
Relief & Benefits
Tax Breaks for Investors

50% Income Tax Credit regardless of individual’s marginal rate, to £100,000 annual maximum.

Investor subscribes for shares on own behalf. Definition of eligible shares is the same as EIS.

Seed EIS relief conditional on investment in company of less than 30% and shares held for a minimum of 3 years.

Deferral Relief for earlier Capital Gains.

Disposal of SEIS shares CGT free after three years.

Capital Loss Relief (seed EIS loss relief) against income tax, rather than current and future years’ Capital Gains.

30% Income Tax Credit against income of current or previous year.

Tax relief is given on a maximum of £1 million invested

No Capital Gains Tax on disposal if shares held for 3 years

Deferral Relief for earlier Capital Gains

Capital Loss Relief against income tax, rather than current and future years’ Capital Gains

  Seed EIS EIS
Tax Relief Conditions
Qualifying Trading Company

Must be unquoted and trading less than 2 years

Must be a standalone company or the parent company of a group

Must carry on a qualifying trade and have a UK permanent establishment.

Max Gross Assets £200,000.

Fewer than 25 employees
Tax favoured cumulative investment limit of £150,000 for the company

Must be unquoted

Must be a standalone company or the parent company of a group

Must have been trading for less than 7 years or had a previous EIS fundraising

Must carry on qualifying trade and have a permanent establishment in the UK

Max Gross Assets £15 million before the Share issue and £16m after

Fewer than 250 employees

Not more than 20% of activities consist of excluded trades

 

Application of Funds

Funds raised by Share issue must be used to fund a qualifying activity
No previous Seed EIS or VCT investment in company.

Within 3 years of issue of shares all monies raised must be spent on a qualifying activity

Funds raised by Share issue must be:
Applied for purpose of Business Activity
100% of funds used within 24 months of Share issue, or commencement of trade, if later
Used to fund a qualifying activity

No more than £5m raised in any 12 month period from investments made under EIS, Venture Capital Trust and Corporate Venturing Scheme

Lifetime limit of £12m or £20m for knowledge intensive companies

Qualifying Individuals Neither a current employee or associate of an employee, unless also a director.
Subscribe for cash in “full risk” ordinary shares with no preferential rights.
No pre-arranged exit

UK Tax Payer
Subscribe for cash in “full risk” ordinary shares with no preferential rights. Some relaxation under consultation.

Need not be UK Resident

If connected with the company income tax relief and CGT disposal relief are not available, however, Capital Loss Relief and Deferral Relief remain available.

Directors, employees and their associates are treated as connected

Individuals who, with their associates own more than 30% of the shares

Non exec directors are not automatically connected, if unpaid.

David Gibbs
David Gibbs
Jane Greenwood
Jane Greenwood
John Stubbs
John Stubbs
Ian Gibbon
Ian Gibbon
Jon Luk
Jon Luk
Briony Bradbury
Briony Bradbury
Sudheer Gupta
Sudheer Gupta
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