The Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) are government incentives that provide private investors with tax breaks to help encourage them to invest in early-stage companies.
SEIS permits an individual to invest up to £100,000 per tax year and receive a 50% tax break based on the amount invested. The investor will also benefit from a capital gains tax exemption on any profits that arise from the sale of shares after three years. This scheme is focused on early start-up companies.
EIS permits an individual to invest up to £1 million per tax year and receive a 30% tax break based on the amount invested. Like with SEIS, the investor will benefit from a capital gains tax exemption on any profits that arise from the sale of shares after 3 years. This scheme is focused on medium-size start-up companies.
Shares in both SEIS/EIS schemes do not attract inheritance tax as long as the shares are held for at least two years. Further, if the shares are sold at a loss, these losses can be offset against the investors capital gains tax.
At Azure, we can help eligible companies with applying for Advance Assurance from HMRC. This is a vital process that allows the investor to claim back the tax relief. This application needs to be performed before any investment is received. We can also help issue the necessary certificates to investors and help them with their personal tax obligations. This allows us to provide a full service to our clients so they can attract investment at a key stage in their business cycle.
Contact us today to see how we can help you.