Steps and timing of the SEIS investment (in the UK)

How does SEIS investment work?

The EIS helps riskier companies by giving their investors federal tax relief, which makes purchasing those companies’ shares more appealing. The EIS grants 30% of what the investor pays for shares as a credit that then reduces the investor’s individual income tax owed for the year.

How long do you have to hold SEIS?

3 years

An investor must hold SEIS/EIS shares for 3 years from the date of issue. If they sell SEIS/EIS shares within this period (and the sale is not to their spouse or civil partner), income tax disposal relief for those they sell will be wholly or partly withdrawn.

What is SEIS scheme UK?

The Seed Enterprise Investment Scheme (SEIS) offers great tax efficient benefits to investors in return for investment in small and early stage startup businesses in the UK. SEIS was designed to boost economic growth in the UK by promoting new enterprise and entrepreneurship.

How do you raise SEIS investment?

How can I raise SEIS investment?

The amount you intend to raise.
Your business plan and financial forecasts.
Latest accounts.
Details of all trading and how much you expect to spend on each activity.
Details of any other venture capital (VC) schemes you’ve raised finance from.

What is the time limit for claiming EIS income tax relief?

If you invest with EIS , SEIS or SITR , you can claim relief up to 5 years after the 31 January following the tax year in which you made the investment.

When can you claim SEIS relief?

You will normally claim SEIS tax relief when you complete your tax return. You will be asked some information which is included in your SEIS3 certificates. These are certificates you receive from each of the companies you invested in, typically a few months after the investment.

What are SEIS rules?

Investor rules: SEIS

Have UK income (but not necessarily live there) …
Not a company employee – but you can be a paid director. …
No substantial interest in the company. …
No related investment arrangements. …
No linked loans. …
No tax avoidance. …
Limit on relief. …
Withdrawal or reduction of the relief.

What happens if an SEIS company goes bust?

Loss relief: If your investment was EIS or SEIS eligible, you can claim loss relief if the business enters liquidation. Loss relief allows you to claim back your losses against your income tax or capital gains tax bill in the year of disposal or the previous year.

How does SEIS loss relief work?

If an investor buys shares in an SEIS/EIS company and the shares are sold at a loss, loss relief enables the investor to offset the loss against their income tax or CGT liability. To calculate loss relief, deduct what the investor collected in tax relief from the amount they invested.

How long does it take to get SEIS?

It seems that HMRC take on average 6-8 weeks to approve an SEIS or EIS application, for both Advance Assurance and Compliance.

How much can a company raise under SEIS?

A company can raise up to £5m annually from investments that qualify for SEIS, EIS and Social Investment Tax Relief, although this figure rises to £10m for ‘knowledge-intensive’ companies.

Is there a minimum investment for SEIS?

Is there a minimum amount required for investment? There is no minimum requirement.