Definition of seed enterprise investment scheme

An enhanced form of the enterprise investment scheme (EIS), the seed enterprise investment scheme (SEIS) provides more generous tax reliefs than EIS. It focuses on smaller early stage companies carrying on or preparing to carry on, a new business in qualifying trade.

Broadly, there is a 50 percent income tax relief for individuals who invest in shares of qualifying companies where their interest is 30 percent or less. In addition, individuals can obtain a capital gains tax exemption where qualifying conditions are satisfied. A further incentive exists for those investors as chargeable gains can be rolled over.

An annual investment limit of £100,000 is set for individuals and a cumulative investment limit of £150,000 for companies applies. Further, the company must not have assets in excess of £200,000 before the investment and should have 25 or fewer employees. It is important to note that the company must neither be a subsidiary or have subsidiaries. [1]

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