The theme of this year’s Budget was very much on growth and entrepreneurship, with continuing support for Seed Enterprise Investment Scheme and Enterprise Investment Scheme investments. Those pursuing Capital Gains Tax Relief on Seed EIS investments have been given a one year extension whereby relief can now be claimed up until the 2014/15 tax year.
As a reminder, the tax benefit of SEIS and EIS investments can be as follows:
SEIS – income tax relief at 50% on your investment regardless of your marginal rate
EIS – 30% income tax relief on your investment
Up to 28% Capital Gains Tax Relief on investments realised to facilitate your investment
Inheritance Tax exemption after two years of share ownership in the EIS company
Income tax relief for any capital loss sustained as a result of your investment – this could be worth up to 103% of your investment if you are a 50% tax payer.
Capital gains tax exemption for shares sold at a profit after three years of ownership.
It may be possible for you to use an investment into an EIS company to reduce your personal tax payments on account for 2013/14 or, if your business is looking to raise finance for growth, please contact Karen Best to establish if your company will qualify for EIS status and therefore be a tax efficient proposition for potential investors.