Enterprise Investment Scheme & SEIS

What benefits does the EIS provide the investor?

The investor can expect:

• Income tax relief at the rate of 30% on the amount subscribed (subject to a ceiling investment of £1 million per tax year
• Any gain arising on a disposal of the shares after three years is free from capital gains tax
• Capital gains tax on gains realised on different assets can be deferred.
• Income tax relief and capital gains relief is available for any losses made on the disposal of EIS shares

As a result of the above, an individual could have a total tax saving and deferral of a substantial part of their investment.

The Seed Enterprise Investment Scheme (SEIS) is similar to EIS but is focused on smaller, early stage companies carrying on, or preparing to carry on, a new business in a qualifying trade.

What benefits does the Seed Enterprise Investment Scheme​ (SEIS) provide the investor?

The investor can expect:

• Income tax relief at the rate of 50% of the amount subscribed for shares in qualifying companies (subject to a ceiling investment of £100,000 per tax year, with the SEIS limit rising to £200,000 from 6 April 2023)
• In contrast to EIS, an SEIS investor is able to exempt up to 50% of the capital gain they have realised on the disposal of any other assets, whilst the balance of 50% of the gain can be deferred
• Provides for an exemption from capital gains tax (CGT) in gains on shares within the scope of the SEIS
• Income tax relief and capital gains relief is available for any losses made on the disposal of SEIS shares

As a result of the above, an individual could have a total tax saving and deferral of a substantial part of their investment.

Charterhouse is well placed to provide tax advice to both individuals and companies wishing to look into the obvious opportunities offered with EIS or SEIS. For a confidential consultation, please contact us.