We have been involved in a number of EIS and SEIS structuring exercises recently. Managing to structure a Company, obtain clearance and help raise money within the parameters of these attractive reliefs is a real specialty of ours.
Many advisers can put together a clearance letter for HMRC on behalf of a Company. However, we believe our expertise lies in perhaps tweaking those cases that, on first glance, may be dismissed as being not suitable. With relatively modest revisions to an offering it may well mean that generous tax reliefs are available to the investor.
In sum, the benefits of EIS are as follows:
- Income tax relief at a rate of 30% on a maximum investment of £1m each tax year;
- Uncapped capital gains tax deferral;
- An Exemption from Capital Gains Tax (CGT) on the sale of shares if the initial investment attracted income tax relief;
- If the investment is disposed of at a loss then Income tax or capital gains tax loss relief should be available.
For the same of completeness, the benefits of SEIS are as follows:
- Income tax relief @50% on up to a maximum of £100k invested in a tax year;
- Exemption from Capital Gains Tax (CGT) on the sale of shares which attracted income tax relief;
- Unlimited capital gains deferral (of which 50% may be exempt on the eventual sale of the EIS shares);
- Income tax or capital gains tax loss relief for losses on sale of the EIS shares.
For further information on EIS and Seed EIS please visit our Technical Centre.
If you are interested in exploring how Seed EIS and EIS might help you raise investment for your business please get in touch. Additionally, if you are an accountant or other professional with Clients who might wish to avail themselves of one of the reliefs, please also get in touch.