A new tax relief for business is to be introduced from 6 April 2012 – the Seed Enterprise Investment Scheme (SEIS). The aim of SEIS is to encourage individuals to invest in small companies by providing incentives in income and capital gains tax. This is of interest to both investor and companies who may be looking for capital to take the next step in their development.
Whilst these incentives are generous, there are many qualifying conditions attached to the scheme for it to successfully operate for company and investor alike. Some of the key questions that need to be considered by clients planning to take advantage of the scheme include:
- what the qualifying criteria are for an eligible company
- which particular investors will qualify
- what constitutes a qualifying investment and
- how the income tax relief and CGT incentives will operate.
Full understanding of these issues will help achieve results efficiently, or indeed save wasted time.