What is the difference between SEIS and EIS?

What is the difference between SEIS and EIS?

The key difference between the two is that SEIS is explicitly targeted at start-ups and very early-stage companies, while EIS can be used by larger and more mature companies – though these are still relatively small and young in the context of the business and corporate landscape in the United Kingdom.

Can you have SEIS and EIS?

HMRC’s guidance is clear that investments cannot be raised under the SEIS and EIS on the same day and that the investments must be raised in a stated order, SEIS first and then EIS. The EIS investments must always be raised at least one day after any SEIS investments.

What is the difference between EIS and VCT?

The EIS is designed to help these small companies raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies. The VCT scheme spreads the investment risk over a number of companies since individuals invest indirectly in a range of small companies.

How does EIS scheme work?

How the scheme works. EIS is designed so that your company can raise money to help grow your business. It does this by offering tax reliefs to individual investors who buy new shares in your company. Under EIS , you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime.

Can family members invest in EIS?

Broadly speaking, individuals (including spouse and relatives) that are either employees of an EIS company and/or hold more than 30% of the shares will be deemed to be connected.

What is SEIS and EIS tax relief?

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are UK government schemes designed to help smaller higher-risk trading companies raise finance, by offering a range of tax relief to investors who purchase new shares in those companies.

Which is riskier VCT or EIS?

VCTs are arguably less risky because the impact of one company failing has less of an effect on their overall returns. But if a holding does well it also contributes less than would be the case with a smaller number of investments. So EISs have the potential for both bigger losses and gains.

What are the tax benefits of EIS?

EIS tax reliefs

  • Income tax relief. Investors can claim up to 30% income tax relief on EIS investments, which gives an incentive for some of the risk normally associated with funding small companies.
  • Tax-free growth.
  • Capital gains deferral.
  • Inheritance tax relief through Business Property Relief.
  • Loss relief.

What’s the difference between a seis and an EIS?

Investors equity stake can be no higher than 30% in order to qualify for EIS or SEIS tax relief. It at your discretion which investors receive SEIS and who receives EIS – typically you would raise under SEIS first You can raise under both SEIS and EIS, however you must not issue shares under both schemes on the same day

When to pay inheritance tax on SEIS and EIS?

With both SEIS and EIS, there is no inheritance tax to pay on shares held for at least two years. Finally, if shares are eventually sold at a loss, the investor may offset the loss against their capital gains tax. What types of companies are eligible for SEIS & EIS?

What’s the difference between Seis and tax break?

The two schemes are similar, but have some important differences. SEIS is focused on very early-stage companies, and allows an individual to invest up to £100,000 per tax year and to receive a 50% tax break in return.

What do you need to know about Seis investment?

In order to accept SEIS or EIS investment, the funds raised must be used for a qualifying business activity. They must be used solely to promote the growth and development of the company, such as hiring new employees, developing the product or marketing.