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<h1 class="title">Tax breaks for Angel investing - Seed Enterprise Investment Scheme (SEIS)</h1>
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<div><div class="collapse-text-text collapsed-text"><p>In April 2012, the Government launched a new scheme to provide particular encouragement to angel investors. This new scheme offers up to 50% relief on making investments in very small businesses with growth potential that are at a very early seed or start-up stage which have only just started trading and may have little or no revenues and very few assets.<br/>
<br/>
<span style="color:#370034"><strong>What relief is available through SEIS scheme?</strong></span></p>
<ul>
<li>
50% income tax relief on up to £100,000 across all investments per tax year</li>
<li>
Exemption from capital gains tax on gains realised from disposals of other assets in <u>2012/13</u> only where the gains are reinvested in SEIS companies in the same tax year</li>
<li>
Inheritance tax relief for SEIS investments</li>
<li>
Exemption from capital gains tax on disposal of SEIS shares after 3 years</li>
<li>
Allowing losses on the disposal of the SEIS shares to be set off against either income or capital gains</li>
</ul>
<p>As with EIS, there are a number of requirements in relation to the investors. For example, investors must be unconnected with the company and under SEIS the investor, together with associates, cannot own more than 30% of the ordinary share capital, the issued share capital or the voting power.<br/>
</div><fieldset class="collapse-text-fieldset collapsed-text-fieldset collapsible collapsed"><legend>Read more</legend><div class="collapse-text-text collapsed-text">
<p><span style="color:rgb(55,0,52)"><strong>Which companies qualify for SEIS?</strong></span><br/>
<br/>
In order to qualify for the SEIS, a company must:</p>
<ul>
<li>
be undertaking, or planning to undertake, a new qualifying business</li>
<li>
have fewer than 25 full-time employees</li>
<li>
have gross assets of less than £200,000 at the time of the SEIS investment</li>
<li>
have been carrying on the particular trade at the date of the relevant share issue for less than two years, though the company could have been established for a longer period</li>
</ul>
<p>These rules are not exhaustive and there are various other conditions that need to be met and maintained.<br/>
<br/>
<span style="color:#370034"><strong>How much can a company raise under the SEIS?</strong></span><br/>
<br/>
The maximum qualifying companies will be able to raise is £150,000 under the scheme, and funds raised must be used within three years. SEIS funds cannot be raised by a company that has raised either EIS or VCT monies previously.<br/>
<br/>
However, the relief cannot be claimed until at least 70% of SEIS funds have been used for the purpose for which they were raised, or the new qualifying trade has been carried on for at least four months. You can then make further investments in the company under the EIS scheme once 70% of the SEIS funds raised have been spent by the company.<br/>
<br/>
As with EIS, the company has to gain clearance from HMRC and should provide you with information that they have gained provisional approval if possible. Be sure you are fully informed about the scheme and whether you and your investee company qualify before you make the investment. <a href="../tiin/tiin600.pdf" rel="nofollow">CLICK HERE for further information on the SEIS scheme.</a></p>
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