What is SEIS and EIS?

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are UK government schemes designed to help smaller higher-risk trading companies raise finance by offering a range of tax relief to investors who purchase new shares in those companies. Where a business is listed as 'EIS' or 'SEIS' on Simple Crowdfunding, this tax relief will be available to qualifying investors.

Benefits of EIS

  • You can claim up to 30% income tax relief on investments up to £1 million per tax year
  • Any gain is Capital Gains Tax (CGT) free if the shares are held for at least three years
  • If the shares are disposed of at a loss (for example, if the company enters insolvent liquidation) you can elect that the amount of loss, less income tax relief, be set against any income tax of the year in which they were disposed of, or, on income of the previous year
  • Payment of CGT can be deferred when the gain is invested in shares of an EIS qualifying company

Benefits of SEIS

  • You can claim income tax relief of 50% on investments up to £100,000 per tax year
  • Certain CGT benefits depending on which tax year the investment was made.

Restrictions

The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and the company concerned, and may be subject to change.  You need to be a UK taxpayer in order to claim SEIS or EIS relief and you will not be eligible for SEIS or EIS tax relief if you are connected with the company. SEIS and EIS is not generally available for property development projects.

Speak to your tax advisor or contact HMRC and search EIS to find out more.

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