Individuals can invest up to £100,000 in a single tax year, spread out between qualifying companies and they must not hold more than a 30% stake in any of the companies they invest in.
The maximum your business can obtain through investments is £150,000 and you must not have previously raised money through other VCT schemes or under EIS.
An investor in an SEIS eligible business can claim back up to 50% of the value of their investment in the form of income tax relief. Therefore, an investment of £10,000, for example, will save £5,000 in income tax.
If the company fails, the investor may claim loss relief. The amount of loss relief you can claim is equivalent to the rate of income tax you pay. For example, if you pay a rate of 45% income tax, you will be able to claim up to 45% of your net loss in income tax relief.
Investors get exemptions from Capital Gains Tax on earnings from shares. Profits realised within 3 years are also exempt from Capital Gains if reinvested in the SEIS.
There are various conditions to be met for the company to qualify for the SEIS scheme. The company must:
All tax reliefs under the scheme will be withheld/withdrawn from investors if the company does not follow the rules for at least 3 years after the investment is made.
The above are general conditions relating to the Seed Enterprise Investment Scheme and each company should be reviewed on a case by case basis.