SEIS & EIS – Mitigating Your Risk

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You’ve probably heard of EIS and SEIS, but do you know what they are?

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS), were introduced by the UK Government to help early-stage companies raise equity finance.

The schemes assist these early-stage businesses by offering a range of tax reliefs and incentives to investors who purchase shares in those companies.

And these benefits really are outstanding.

SEIS encourages investment in qualifying companies by providing investors with 50% of their investment back in income tax relief.

On top of this, investors can also benefit as the sale of their shares may be exempt from capital gains tax.

On the flip side, loss relief is available if the company goes bust.

EIS meanwhile, provides investors with up to 30% of their investment back in income tax relief.

It also allows investors to defer any capital gains tax on gains which are reinvested in EIS eligible shares.

And like SEIS, gains from the sale of your shares may also be exempt from capital gains tax…

and again… loss relief is available if the company fails.

The availability of these benefits differs from person to person, depending on individual circumstances… so you should speak with a tax specialist to understand how EIS and SEIS might benefit you, before you invest.

If you would like to learn more about the two schemes, HMRC’s website provides an excellent overview.

https://www.gov.uk/seed-enterprise-investment-scheme-background
https://www.gov.uk/government/publications/the-enterprise-investment-scheme-introduction

If you are considering investing into a start-up, look out for those that qualify for either scheme…

And ask to see the company’s Advanced Assurance, which is HMRC’s confirmation that a business is in fact, eligible for one of the schemes.

By investing wisely into start-ups that are eligible for EIS or SEIS, you can actually start to benefit from your investment almost immediately.

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