Seed enterprise investment scheme ― tax relief

By Tolley

The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Seed enterprise investment scheme ― tax relief
  • SEIS tax benefits
  • SEIS income tax relief
  • Dividends from SEIS investments
  • SEIS: capital gains relief
  • SEIS: re-investment relief

The seed enterprise investment scheme SEIS is designed to encourage individuals to invest in new shares issued by qualifying unquoted companies SEIS is specifically aimed at smaller companies which have only started to carry on a qualifying trade and complements the enterprise investment scheme EIS as it is expected that companies may want to go on to use EIS after an initial investment under SEIS ITA 2007 ss 257A 257HJ HMRC has issued a helpsheet HS393 and guidance at VCM30000 onwards See the Seed enterprise investment scheme SEIS introduction guidance note for an overview of the SEIS scheme and the Enterprise investment scheme introduction guidance note for more details on the EIS scheme SEIS tax benefits A subscription for eligible shares of a qualifying SEIS company is a tax efficient investment for the individual who can benefit from the following tax reliefs income tax relief for the investor of up to 50 of the amount invested subject to an annual subscription limit of 100 000 gains on disposals of SEIS shares after three years may be exempt from capital gains tax CGT CGT exemption allows investors disposing of any asset an exemption of up to 50 of their subscriptions in SEIS shares during the same tax year losses on disposals of SEIS are allowable for CGT purposes SEIS investments should qualify for IHT business property relief BPR after two years of ownership see the Business property relief BPR guidance note SEIS income tax relief SEIS income tax relief is 50 on the lower of the amount subscribed for the shares the annual limit of 100 000 This income tax relief works in much the same way as the income tax relief fo

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