The Seed Enterprise Investment Scheme (SEIS) was launched in 2012 to encourage greater investment in start-ups by offering a range of income tax and capital gains tax reliefs for subscribing for new shares in these companies.
Investors can claim up to 50 per cent relief for income tax on the cost of shares on a maximum investment of £100,000 in a single tax year.
Profits earned on shares held for more than three years will be exempt from capital gains tax. If capital gains are realised before three years have expired, but re-invested into qualifying SEIS shares, then they will also be exempt from capital gains tax. The annual limit for these is also £100,000.
Chancellor George Osborne announced in his March 2013 Budget that the capital gains tax exemption would be extended until 2015, providing further opportunities for investors to take advantage of this tax-saving opportunity.
There are a number of conditions in place for SEIS, including:
- A limit of £100,000 which can be invested in a single tax year;
- Investors cannot hold more than a 30 per cent stake in the company;
- The company cannot raise more than £150,000 in total through SEIS investment;
- The company must have a permanentUKbase;
- The company must have fewer than 25 employees and no more than £200,000 in assets;
- The company must trade in an approved sector, which generally excludes the financial sector.
At Murphy Salisbury, we are highly experienced in advising individuals looking to invest in start-ups on how to make the most of the tax reliefs available to them.
To find out more about our leading firm of accountants in Stratford-upon-Avon and Warwickshire, please contact us.