News: October 2012

Guidance from HMRC on the new seed investment scheme (SEIS)

This new, heavily tax based investment opportunity is attracting plenty of attention. This is hardly surprising considering that the scheme offers income tax relief at a fixed 50%, plus capital gains tax exemption if you reinvest the amount of the gain into an SEIS investment.

We can advise prospective investors and companies looking for funding, and we have now received useful guidance from HMRC to help ensure that the requirements for tax relief are met. As you can imagine (given the size of the tax breaks), important conditions need to be met and great care is needed when considering any SEIS investment.

If a company wants to raise funds via SEIS, we can contact HMRC to ask whether the company’s line of business qualifies (as not all of them do unfortunately). A company can raise a maximum of £150,000 for a new trade, and an investor can own a maximum of 30% of the shares (including those owned by some relatives and other people connected with them).