For those companies looking for alternatives to bank funding, the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCTs) are options well worth exploring. In relation to the EIS and SEIS, tax relief is potentially available to owner-managers of businesses, as well as outside investors.
Insights and analysis
Qualifying companies: EIS, SEIS & VCTs
Currently, the aggregate annual funding limit under the venture capital schemes is £5m. This is on a rolling twelve-month period, with no reference to tax years or financial years. The venture capital schemes comprise EIS, SEIS, SITR (Social Investment Tax Relief) and investment by VCTs.
Capital gains tax relief on sale of shares
EIS, SEIS and VCT investments provide capital for smaller unquoted companies. This type of investment is generally considered to be higher risk than mainstream investments, so it is important to assess the investment risks as well as the possible tax breaks.
Seed enterprise investment scheme (SEIS)
The Government introduced the SEIS to encourage investment in small start-up companies.
A guide to Enterprise Investment Schemes (EIS)
EIS were introduced in 1994 to help provide unquoted companies with capital to aid their development.
A guide to Venture Capital Trusts (VCT's)
VCT's were introduced by the Government in 1995 as a tax incentivised method of stimulating growth in the economy.
Between them, our people have experience of a wide range of businesses, across a number of industries.