Workshop – What can EIS & SEIS do for your business?
1st April 2014
Our second workshop took place at MyHotel on 25 March and proved to be a topic of interest to a lot of local businesses.
The workshop was hosted by myself, Peter Hedgethorne, and Laura Salt from Fortis Law.
Laura and I each took a turn presenting information on the schemes, with my part concentrating on the tax breaks and Laura spelling out the legal hoops that need to be negotiated, and we also highlighted the potential pitfalls which can result in tax relief being disallowed.
The key points of EIS are as follows:
· 30% income tax relief for investors in ordinary shares in most trading companies, up to a total investment of £1 million per year.
· Profit from eventual disposal of shares exempt from capital gains tax.
· Deferral of capital gains tax on other disposals available by “rolling over” into the EIS shares.
· Potential tax relief of up to 45% on any losses incurred on EIS shares.
· Available for investment in companies with gross assets of up to £15million.
The key differences with SEIS are as follows:
· 50% income tax relief for investors, but limited to £100k per investor per year, and a maximum of £150k per company (in total).
· Exemption (as opposed to deferral) from capital gains tax for gains on other disposals, up to 50% of the invested amount.
· Company must be a start up within two years before investment, and have maximum gross assets of £200K.
· Loss relief and capital gains tax disposal relief available as for EIS shares.
The full presentation is available here and if you would like to know more about the various schemes available to you and your business, please get in touch and we will be happy to discuss the options available to you.
Blog written by Peter Hedgethorne