The Seed Enterprise Investment Scheme (SEIS) has been introduced to help encourage investment in small companies. Up to £150,000 can be raised through SEIS.
SEIS offers tax relief to individuals who acquire new (fully paid) ordinary shares in qualifying trading companies. The trade has to be new (not begun more than 2 years before the shares are issued) and the company mustn’t have gross assets of more than £200,000, or more than 25 employees.
To qualify, the individual must not be an employee or control more than 30% of the share capital. However, relief is available to company directors as well as individuals who are not resident in the UK.
If the shares are held for more than 3 years, the tax breaks for investors are:
- a tax reduction equal to 50% on an investment of up to £100,000;
- exemption from capital gains tax on sale of the shares; and
- the ability to ‘rollover’ gains on other assets sold in 2012/13 if the proceeds are reinvested in SEIS shares before 6 April 2013.
After an initial investment under SEIS, incentives for further investment may also be available under the existing Enterprise Investment Scheme (EIS).
For more details of the scheme and how you might benefit please contact pberry@springfords.com