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Enterprise Investment Scheme and Seed Enterprise Investment Scheme (SEIS)

EIS and SEIS provide generous tax reliefs for investors including income tax relief for the initial investment (30 percent for EIS investments and 50 percent for SEIS investments) and capital gains tax free disposals of the investment.

These tax reliefs are designed make it easier for companies to raise equity capital.  However as is often the case when tax reliefs are available, they come with strict conditions.

In order for the investor to benefit from the tax benefits both the company and the investor are required to meet certain conditions at the time of the investment – many of which must continue to be met for a three year period starting from the date of the investment. The EIS and SEIS legislation can be a minefield and often companies will either fail to meet these conditions or unwittingly breach them during the three year qualifying period. This will result in the tax relief being either denied or withdrawn.

Freestone Jacobs can advise both companies and investors on any proposed EIS or SEIS investment to ensure that tax relief will be due.  We can draft and submit an advance assurance request to HM Revenue and Customs (HMRC) which will provide investors with confidence that relief will be due on their investment.  Once the investment has been made, Freestone Jacobs can also submit the company’s claim for relief which, once approved by HMRC, will enable the company to formally issue tax certificates to the investors so that they may claim the tax relief due.

For more information please contact us.

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