The Seed Enterprise Investment Scheme (SEIS)

Investing Dec 15, 2011

This new tax advantaged form of venture capital scheme was announced at the Autumn Statement 2011; it will be focused on smaller, start-up companies and will provide a form of relief similar to the EIS Scheme. This scheme will make tax relief available to investors who subscribe for shares and have less than a 30% stake in the company.

The main points to note are as follows:

  • The type of company this applies to is one that has less than 25 employees with assets of up to £200,000 who are preparing to carry on new business
  • This will apply to the subscription of shares, using the same definition of EIS Shares
  • The annual amount allowed for relief each year for an individual investor is £100,000
  • There will be an exemption from CGT for capital gains made on shares within the scope of the SEIS regime
  • There will be an exemption for gains realised on disposals of assets in 2012/2013 where the gains are reinvested through the new SEIS in the same year
  • The individual investor will be given 50% income tax relief for the investment made and this will also be available for directors who invest in their company, provided they hold less than 30% of the sharesThe impact of these changes is that an individual investor may be able to obtain up to 78% tax relief from income tax and capital gains tax. If the shares also qualifying for Business Property Relief the tax saving afforded could be even greater still. However, investors may find it difficult to find companies in which they can invest to obtain maximum relief which also provide a commercial return on investment.


Franck Sidon

With over 15 years of experience as a Managing Director at TaxAssist Accountants, I have helped thousands of businesses and individuals achieve their financial goals and optimize their tax efficiency.