Seed Enterprise Investment Scheme (SEIS)

About

The Seed Enterprise Investment Scheme (SEIS) is a UK government initiative designed to help early-stage startups attract private investment by offering significant tax reliefs to investors, thereby reducing their risk and enhancing the appeal of investing in new businesses. Eligible companies can apply for advance assurance from HMRC, issue compliant shares, and benefit from various tax incentives that can accelerate their funding process and attract angel investors and early-stage funds.

Benefits

• Investors can receive up to 50% income tax relief on their investment
• Capital gains tax exemption after three years
• Losses can be offset against income tax if the company fails
• Inheritance tax exemption after holding for over two years
• Flexibility to carry back investment to the previous tax year for tax relief.

Eligibility Criteria

• Must be a UK-registered company
• Must not be listed on a recognized stock exchange
• Must be engaged in a qualifying trade for no more than 3 years
• Total assets must not exceed £350,000
• Fewer than 25 full-time equivalent employees
• Cannot be a partnership or have received EIS or VCT funding
• Investment must be used for qualifying trade or R&D within 3 years
• Shares must be ordinary shares with no special rights
• Investors must be UK residents and hold shares for at least 3 years
• Investment must carry real capital risk
• Maximum investment of £250,000 at the company level and £100,000 per individual investor.