Why Invest SEIS & EIS
30% TAX RELIEF – For more information, please visit: hmrc.gov.uk/eis/index.htm
- EIS - You get income tax relief of 30 per cent. So if you invest £10,000 in a company that is eligible for EIS, you can knock £3,000 off your income tax bill in the year that you invest.
- You’ll pay no capital gains tax on any profits you make from an EIS investment. So if you invest £10,000 and five years later sell your shares for £20,000, you’ll get the full benefit of the £10,000 profit, saving you at least £1,800.
- There’s no inheritance tax to pay on shares bought through EIS.
- As with EIS, there’s no capital gains tax to pay on profits, no inheritance tax, and you can claim loss relief in the same way.
- There is an extra relief called capital gains reinvestment relief. This is useful to you if you have recently paid capital gains tax on other investments. You can reclaim up to 50 per cent of the tax paid if you reinvest that money into SEIS. (This was originally introduced as a temporary measure, but in the 2014 Budget, Chancellor George Osborne made it permanent).
EIS Tax Incentives
First introduced in 1994, the Enterprise Investment Scheme or EIS was designed by the UK Government to encourage equity investment in unlisted (private) companies. The idea behind the scheme is to stimulate entrepreneurial activity in the UK. An EIS encourages investors to invest in qualifying companies through a series of very generous tax reliefs.
More about how the using SEIS/EIS can help you!
Example (cash effect at the outset)
Income Tax Relief at 30%
Capital Gains Deferral
Net Cost of Investment