Seed Enterprise Investment Scheme (SEIS) made permanent
In 2012 SEIS was introduced to encourage investors to support UK small business by offering a range of tax incentives. These included exemption from Capital Gains Tax (CGT) for gains reinvested to purchase shares in qualifying companies and income tax reductions of up to 50% of the amount invested.
When first introduced a ‘sunset clause’ was written into the legislation, restricting the life of the Capital Gains Tax reinvestment relief to include just 2012/13 and 2013/14 tax years and the income tax relief to 5 April 2017. Finance Bill 2014 will remove this clause, meaning that the CGT relief and income tax relief will always be available where gains are used to reinvest in SEIS qualifying companies.
Broadly an investment will only qualify for SEIS where the amount invested is no more than £100,000 and the investor’s stake is not more than 30%.