Tax Considerations for SEIS and EIS Investing
The Enterprise Investment Scheme (“EIS”) is a series of UK tax reliefs launched in 1994 in order tosucceed to the Business Expansion Scheme. It is designed to encourage investments in smallunquoted companies carrying on a qualifying trade in the United Kingdom.
Symvan Capital has recently launched the Symvan Seed EIS Opportunities Fund. It providesinvestors with the benefits of a portfolio approach to investing in growth companies combined with the significant tax advantages offered.
This document summarises the tax benefits for the individual investor of both the EnterpriseInvestment Scheme and the Seed Enterprise Investment Scheme (“SEIS”).
The SEIS and EIS reliefs were introduced to provide incentives to investors to invest in smallunquoted companies, which are generally perceived to be higher-risk investments. Investing in such companies requires significant due diligence given the higher risk nature of such investing, and advice on personal circumstances should always be sought from an Independent Financial Adviser or Wealth Manager.
Recent changes to legislation
- EIS has been available to investors since 1994 and legislation has gradually been improvedthrough increases in tax reliefs and limits.
- On 6 April 2012, the Seed Enterprise Investment Scheme – SEIS – was launched, with the goal tostimulate seed level entrepreneurship and kick-start the economy by offering more attractivetax incentives to investors than was available to EIS investors. It was originally due to expire on5 April 2017.
- In the March 2014 Budget, it was announced that SEIS and its 50% capital gains taxreinvestment relief is to be made permanent.
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