SEED / Enterprise Investment Scheme

SEED / Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) was introduced by the government in 1994 and to encourage private investment in smaller higher-risk trading companies. The Seed Enterprise Investment Scheme (SEIS) followed in 2012 for early stage start-up companies, both offer tax benefits including Capital Gains Tax relief and Income Tax relief.

Current opportunities

For more information on our current opportunities please choose which of the following options applies to you.

(This is so we can meet our regulatory obligations under the Financial Services and Markets Act 2000.)

I am a…

professional financial adviser

Authorised and regulated by the FCA.

High net worth individual

I have annual income of more than £100,000 and/or savings of more than £250,000.

Sophisticated investor

Currently or in the last 2 years I have invested in an unlisted company, worked in private equity, or been the director of a company with a turnover of more than £1 million.

Previous opportunities

In order to qualify for SEIS, a company must:

Employees

have fewer than 25 employees

Assets

have no more than £200,000 in gross assets

Investments

not have had any investment from a Venture Capital Trust (VCT) or issued any shares in respect of which it has submitted an EIS compliance statement

Trade

Any trade being carried on by the company at the date of issue of the relevant shares, must be less than 2 years old at that date.*

History

the company must not have carried on any other trade before it started to carry on the new trade

Funds

not receive more than £150,000 in total under the scheme.

* That condition applies whether the trade was first begun by the company, or whether it was first begun by another person who then transferred it to the company. (Please note: the company need not have started trading when it issues the shares)

A working example of the benefits:

If you have £150,000 of income and a capital gain of £100,000 you would be liable to pay the following tax:

Income Tax (IT) £50,000
Capital Gains Tax (CGT) on £100,000 @ 28% £28,000
TOTAL TAX DUE £78,000

If an investment of £100,000 is made in to SEIS shares the position would be:

IT on £150,000 £50,000
IT relief on £100,000 @ 50% (£50,000)
IT DUE Nil
CGT on £100,000 @ 28%£28,000
CGT relief on £100,000 @ 50%(£14,000)
TOTAL CGT DUE£14,000

= Total IT and CGT reduction of £64,000

(This example is for illustrative purposes and is not a forecast.)

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on info@premierecapital.co.uk