The Seed Enterprise Investment Scheme (or SEIS) is an extremely generous incentive set up to encourage individuals to invest in businesses that are just getting started.
SEIS offers several tax reliefs significantly reducing your tax bill and as a result the amount of capital you put at risk with your investment.
UK taxpayers can invest up to £100,000 in qualifying companies.
For £10,000 investment, your income tax is reduced by £5,000 for that year. In effect HMRC gives you half your investment back through your tax return. You can also "Carry Back" this relief to apply some or all of it to the previous tax year.
If you had previous capital gains and used them to invest into SEIS company, then those gains are exempt from capital gains tax.
Any gains you make from selling your SEIS shares are fully exempt from Capital Gains Tax. You must hold the shares for at least 3 years and have claimed the income tax relief above.
Any losses on the shares can be set against your Income or Capital Gains Tax.
The shares get full inheritance tax relief as long as the investors death is at least 2 years after investment
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