21 Nov Investment Schemes: Company and Investor Perspectives
At Egan Roberts we provide year round tax advice on income tax, capital gains tax, inheritance tax trust and estates and non-domiciliary tax issues.
If you are interested in growing your business or making an investment, the below investment schemes may be available to you.
Enterprise Investment Scheme (EIS)
The company’s perspective
An EIS raises money for your company to help grow your business.
It offers tax reliefs to individuals who buy new shares in your company.
You can receive up to £5 million per year up to a company lifetime maximum of £12 million. However this does include any amounts received from other venture capital schemes.
Can my company apply?
If your company is less than 10 years old, has less than 250 full time employees and less than £15 million of assets, you may be eligible.
All conditions of application for EIS are set out here.
The investor’s perspective
An investor can receive the following incentives:
- Income tax relief being 30% of the investment up to a maximum investment of £1 million.
- Capital gains tax exemptions
- Inheritance tax exemptions
- Reinvestment relief
- Loss relief
Note: If your income tax liability is lower than the 30% relief, you must relinquish the excess relief.
Seed Enterprise Investment Scheme (SEIS)
Similar to the EIS, if your company is less than 2 years old, has less than 25 full time employees and less than £200,000 of assets, you may be able to receive up to £150,000.
All conditions of application for SEIS are set out here.
The investor can receive income tax relief of 50% of their investment up to a maximum investment of £100,000.
Reinvestment relief, loss relief and capital gains tax relief are also available with a SEIS.
An overview of venture capital schemes for investors is available here.