A seed to start-up –

Why Invest in SEIS? -Vantaggi nel finanziamento alle imprese

If you are an investor …

As the end of the tax year approaches,  you might be interested to consider tax efficient investments to enjoy some or all of the tax benefits.

One of them is the Seed Enterprise Investment Scheme (SEIS),  launched in April 2012 as a means of encouraging investment in start-up companies.

SEIS incentivise private investors to risk capital by investing in small and young businesses with significant investment return potential. Incentives come in the form of income, capital gains and inheritance tax reliefs which combine to make SEIS one of the most tax advantaged, government backed investments available

You can invest in SEIS and join the tax benefits for the tax year ending on 5 April 2020 and you can treat some or all of the shares as being issued in the preceding tax year, as long as you had not reached the limit for the value of SEIS shares purchased (£100,000) in that year.

Why invest in SEIS?

Up to 50% income tax relief on an Investor’s subscription into a Qualifying Company is available on an aggregate maximum Qualifying Investment of £100,000 in the tax year ending 5 April 2018, subject to the Investor having paid sufficient tax for the year.

  • Capital gains tax re-investment relief

An individual may claim 100% CGT deferral in respect of capital gains that are reinvested in SEIS Qualifying Investments made in the same tax year in which the gains were realised.

  • Exemption from capital gains tax

Any capital gains realised on a disposal of Shares in a Qualifying Company after the Relevant Period, and on which SEIS income tax relief has been given and not withdrawn, will be capital gains tax free.

  • Inheritance tax exemption

The value of investments that have been held for two years or more at the date of death should qualify for IHT business property relief. The Business Relief rules generally relate to the ownership of a business, or share of a business included in the deceased estate for inheritance tax purposes. HMRC rules state that Business Relief of either 50% or 100% can be claimed on a business or interest in a business as well as shares in an unlisted company.

  • Loss relief

A loss on EIS qualifying shares due either to disposal at a loss or the shares becoming of negligible value should be capable of being offset against other allowable taxable income. Taken together with the initial income tax relief of 50%, even if their investment was to fall to zero, for a current 45% tax payer, this represents reliefs totalling up to 72.5% or up to 72.5p in the £1 being returned to the Investor, or in other words, a maximum loss of 27.5p for every £1 invested into each company.

  • Business Investment Relief

Prior to 6 April 2012, individuals who were tax resident in the UK, but domiciled outside the UK, would have suffered UK tax on remittance to the UK of overseas income and gains. Under legislation in the 2012 Finance Act, such individuals will no longer suffer UK tax on remittances provided that the money remitted is used in the UK to make a “qualifying investment”. Whilst the definition of “qualifying investment” is wider than the definition of a SEIS qualifying investment, it is the intention of the Fund to invest in Shares that will qualify for these reliefs. Thus, an Investor can benefit not only from the ability to make tax free remittances, but also from the various tax reliefs that arise from SEIS investment. The investment must be made within 45 days of remitting the funds to the UK.

EXAMPLE SEIS INVESTMENT

DOWNLOAD SEIS Case study

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