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Individuals investing in start-ups companies and SME (SMEs) through the through EIS and SEIS initiatives are set to benefit from £525 million in tax relief for the 2014/15 tax year says Enterprise Tax Centre’s (ETC) Richard Cunningham. ETC state that this a substantial increase from previous years and shows a growing interest and willingness to invest in this type of growth company.
According to ETC, HMRC has estimated that the total income tax relief on investments made through:
Why do we have such reliefs?
The two schemes were created to encourage investment in small, unquoted companies. EIS, which has been around for decades in one form or another, was expanded in April 2012 to enable individuals to invest larger amounts in to a wider array of companies.
Very much the newer kid on the block, SEIS was launched in April 2012 time to further stimulate growth for and provide finance to start-ups and earlier stage businesses.
What’s in it for me?
The income tax relief under each scheme is as follows:
Both of these schemes allow investors to sell their shares in the Company after three years exempt of CGT.