Have You Used Your EIS/SEIS Allowance?

With everything that is currently happening in the world, it’s easy to forget that the end of the financial year is just around the corner.

And even though investing may not be your priority right now, we did feel the need to remind you that this means time is running out take full advantage of the UK’s generous EIS (Enterprise Investment Scheme) and SEIS (Seed Enterprise Investment Scheme) benefits for the current tax year.

To recap, under EIS, your benefits include:

  • Income tax relief of 30% – meaning if you invest £10k in an eligible company, you can take £3k off your income tax bill in the year you invest.
  • 100% capital gains tax relief on any profits you make from an EIS investment.
  • Loss relief – should you make a loss on your investment, you can offset that loss against your income tax.
  • No inheritance tax to pay on EIS shares.

SEIS benefits, which encourage investment into very early stage companies (less than 2 years old) include:

  • Income tax relief of 50% – meaning you get £5k off your income tax bill for investing £10k under SEIS.
  • No capital gains tax to pay on profits, no inheritance tax, and you can claim loss relief in the same way as EIS.
  • Capital gains reinvestment relief – if you have recently paid capital gains tax on other investments, you can reclaim up to 50% of the tax paid, if you reinvest that money into SEIS opportunities.

You can invest a maximum of £1 million each year through EIS, and £100k into SEIS eligible companies.

Currently two companies on the platform carry SEIS benefit and several others have EIS approval, providing the generous tax breaks mentioned above. You can learn more and see these opportunities by clicking here.

To take advantage of these benefits this tax year you need to invest before April 5th, 2020.

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