Significant benefits for investment into a qualifying Seed Enterprise Investment Scheme business include:
1) Cash Back – The ability to reclaim up to 50% of the amount invested for shares, through relief against income tax. This means the real cost of investing in a start-up business is only 50% of what you agree to invest (up to an annual investment limit of £100,000);
2) Tax Free – Exemption from capital gains tax on a subsequent sale of the shares you originally invested in.
In order to qualify, both the company and the investor must satisfy certain conditions. Of particular note:
- the company’s gross assets must not exceed £200,000 immediately prior to the share issue;
- the company must be no more than 2-years-old;
- the investor must hold the shares for a period of 3 years;
- the investor must not hold more than 30 percent of the company’s issued share capital;
- individual annual maximum investment limit of £100,000 (can be spread across more than one Seed Enterprise Investment Scheme qualifying company); and
- maximum allowable investment in any company under Seed Enterprise Investment Scheme is £150,000.
Contact our Corporate Finance team