EIS & SEIS Schemes
Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) investments can offer valuable tax reliefs to investors, alongside the opportunity to support growing UK businesses.
Both schemes are designed to encourage investment in smaller businesses by offering tax incentives to eligible investors. However, these investments can carry significant risks because smaller and early-stage companies may have uncertain prospects and limited trading histories. Careful due diligence and an understanding of the risks are essential before investing.
Enterprise Investment Scheme (EIS)
EIS provides a range of potential tax advantages for qualifying investments. The reliefs available depend on the investor's circumstances, the company meeting the relevant conditions and the applicable legislation.
Income Tax Relief
Eligible investors may claim Income Tax relief on qualifying EIS subscriptions, subject to the applicable limits and conditions. Carry-back provisions may allow relief to be claimed against the previous tax year's liability.
Capital Gains Tax Deferral
In qualifying circumstances, an EIS investment may allow certain capital gains from other assets to be deferred. Eligibility and timing requirements apply.
Capital Gains on EIS Shares
Gains on qualifying EIS shares may be exempt from Capital Gains Tax if the relevant conditions are met, including the conditions relating to Income Tax relief.
Loss Relief
If qualifying EIS shares are disposed of at a loss, relief may be available against capital gains or, subject to the rules, income.
Inheritance Tax Considerations
Qualifying shares may be eligible for Business Relief for Inheritance Tax purposes, subject to the applicable ownership period, company conditions and current legislation.
Investment Limits
Annual investment limits and relief rates depend on the rules in force and the investor's circumstances. We can help you understand the requirements relevant to a potential investment.
Seed Enterprise Investment Scheme (SEIS)
SEIS is intended to encourage investment in qualifying early-stage companies. It offers a different set of eligibility requirements and relief limits from EIS, reflecting the focus on young businesses that may carry higher investment risk.
Support for Early-Stage Businesses
SEIS focuses on qualifying start-ups and smaller, younger companies seeking investment to help develop their business.
Potential Tax Advantages
Eligible investors may benefit from Income Tax relief, potential Capital Gains Tax reliefs and loss relief, subject to the scheme's conditions.
The availability and amount of relief depend on the investment date, the investor's tax position and whether all relevant conditions are satisfied. Tax rules and limits can change, so advice should be based on the current legislation rather than historic scheme figures.
Considering an EIS or SEIS Investment?
We can help you understand the tax implications, eligibility requirements and risks involved. To discuss your circumstances and the investment opportunities available, please visit our contact page.