Enterprise Investment Scheme

Within the Chancellor of the Exchequer’s Autumn Statement to Parliament details of an extension to the Enterprise Investment Scheme were revealed.

The new Seed Enterprise Investment Scheme is expected to provide an alternative to bank lending for higher-risk start-up companies. The scheme will be available from April 6, 2012, and will run alongside the existing Enterprise Investment Scheme, targeting start-up companies.

The main features of the Seed Enterprise Investment Scheme are as follows:

  • Income tax relief of 50% of the investment will be available to individuals who invest in qualifying companies, irrespective of their marginal rate of tax.
  • An annual investment limit of £100,000 per individual will apply.
  • A cumulative investment limit of £150,000 per company will apply.
  • Gains arising on the disposal of other assets in 2012/13 will attract a capital gains tax exemption if they are reinvested through the SEIS in the same year. Companies are not allowed to raise more than £2 million in any 12 month period from the three venture capital schemes.  The three schemes are the EIS, the Corporate Venturing Scheme (CVS) and Venture Capital Trusts (VCTs), Investments from any or all of these schemes must fall within the £2 million limit.

There are four current separate EIS tax reliefs for investors as follows:

  • Income Tax Relief.
  • Capital Gains Tax Exemption.
  • Loss Relief.
  • Capital Gains Tax Deferral Relief.

Click this link for further details including which activities are eligible and who can apply. 

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