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Tax Efficient Investment

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Tax Efficient Investment

Tax Efficient Investment

The Seed Enterprise Investment Scheme (SEIS) offers great tax-efficient benefits to investors in return for investment in small and early-stage start-up businesses in the UK.

SEIS was designed to boost economic growth in the UK by promoting new enterprise and entrepreneurship.

The scheme was introduced in the Chancellor George Osborne’s 2011 Autumn Statement which heralded a big shake-up of tax incentives for investors, with the Enterprise Investment Schemes and Venture Capital Trusts also being revamped

Now the Seed Enterprise Investment Scheme has become one of the most revered government-backed schemes ever created.

We have outlined the opportunities the Seed Enterprise Investment Scheme creates for investors and for start-up businesses looking to source finance.

Some of the most important points to consider are:

  • SEIS investors can place a maximum of £100,000 in a single tax year, which can be spread over a number of companies.
  • A company can raise no more than £150,000 in total via SEIS investment.
  • Investors cannot control the company receiving their capital, and must not hold more than a 30% stake in the company in which they invest.
  • Investors can receive up to 50% tax relief in the tax year the investment is made, regardless of their marginal rate.
  • The company seeking investment must be based in the UK, and have a permanent establishment in the British Isles.
  • The company must have fewer than 25 employees. If the company is the parent company of a group, that figure applies to the whole group.
  • The company must be no more than two years old.
  • The company must have assets of less than £200,000.
  • The company has to trade in an approved sector – generally not in finance or investment, for example, a property company can’t raise capital through SEIS.
  • The aim of the SEIS, says the Chancellor, is to stimulate entrepreneurship and kick-start the economy.
See also  Capital Gains Tax

For more information on Tax Efficient Investment, Book a Free Consultation
Please email us now: info@makesworth.co.uk or Call: 020 7993 8850

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