Seed investment scheme begins to take root — SEIS extended
The Budget 2013 contained a number of measures to extend the capital gains tax relief for re-investing gains in Seed Enterprise Investment Scheme (SEIS) shares.
Amid the inevitable analysis of the winners and losers in the wake of George Osborne’s fourth budget, one group to emerge with an undoubted victory are business angels and the start-up companies in which they invest. SEIS was introduced in 2012 as the junior companion to the Enterprise Investment Scheme, which offers tax reliefs to those investing in small companies in the light of the risks associated with doing so. SEIS provides even more attractive reliefs in respect of investments in even more early-stage companies, which often struggle to attract investment because of the heightened risks attached.
The original scheme allows investors subscribing for new ordinary shares in qualifying companies, broadly unquoted companies with gross assets of £200,000 or less and fewer than 25 full-time employees which carry out a qualifying trade, to claim both income tax and capital gains tax relief. The income tax relief is against 50% of the sum invested in the start-up company up to an annual investment limit of £100,000, provided the shares are held for three years. An SEIS investor qualifying for such relief can also claim an exemption from capital gains tax on any gain arising on the disposal of the shares…
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