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What are SEIS and EIS schemes?

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) provides tax incentives in the form of a variety of Income Tax and Capital Gains Tax (CGT) reliefs to investors who invest in smaller, unquoted, trading companies.

Under SEIS, a start-up may receive investment up to a maximum of £150,000 whereby the investor will be eligible for income tax relief of 50 per cent.

  • Relief is offered regardless of the rate at which the investor pays tax.
  • The SEIS applies to investment in companies, and not in unincorporated businesses or LLPs.
  • Share loss relief is available, after taking into account tax relief already given on the sale of SEIS shares at a loss.
  • A further relief is given when capital gains are reinvested into a SEIS company

EIS provides tax incentives in the form of a variety of income tax and capital gains tax reliefs to investors who invest in start ups in very much the same way as SEIS.

  • The primary tax relief takes the form of a reduction in Income Tax at a flat rate of the cost of new shares.
  • Tax relief is 30%
  • There is no minimum amount an investor can invest in any one company (prior to 2012/13 this was £500); however there is a maximum investment of up to £1 million in each tax year
  • The maximum amount of investment that a qualifying company can receive is limited to £5 million per year and a lifetime cap of £12million overall or £20million if the company is knowledge intensive.

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