Investing in new companies
The Seed Enterprise Investment Scheme (SEIS) was introduced in April 2012 as a useful way for new companies to attract early investment up to £150,000. It is also an appealing scheme for investors because of the substantial tax breaks on offer.
SEIS is a simpler version of the much larger and longer-established Enterprise Investment Scheme (EIS). SEIS is aimed at companies that are less than two years old. Bishop Fleming has considerable experience of helping new companies to find funding and can help them to qualify for the scheme, as well as advise potential investors on the best options available. We will ensure that investments are structured in the most tax efficient manner in order to maximise the reliefs available.
Whether you are looking to attract finance or contemplating an investment opportunity, our cumulative knowledge, expertise and contacts in the market are available to you to provide you with the best advice.
Download our SEIS Factsheet for further information.
As long as the SEIS-qualifying shares are retained for at least three years, an individual can reduce his income tax liability by an amount equal to 50% of the amount invested. The maximum investment that an individual can make is £100,000 per year. Subject to this maximum, all or part of the investment can be treated as paid in the previous tax year.
SEIS-qualifying shares held for more than three years will be free of capital gains tax where sold at a profit. Where the shares have not been held for three years before disposal, they would be chargeable, though may qualify for a reduced 10% rate of tax if Entrepreneurs’ Relief conditions are met.
Where SEIS-qualifying shares are sold at a loss (after taking into account the initial income tax relief), the loss can be set against the individual’s capital gains or income in the year of disposal or the previous year.
SEIS shares that are held for more than two years are normally exempt from Inheritance Tax.