In George Osborne’s autumn statement last year the government announced a big change in the tax incentives available for investors looking to invest in UK small businesses and start-ups with the introduction of the Seed Enterprise Investment Scheme (SEIS), due to take effect on 6th April 2012.
Key benefits of SEIS for investors
SEIS investors can invest up to £100,000 in a single tax year, rising to a maximum £150,000 over two or more tax years, in a single company. In return, investors receive tax relief of 50% on their income tax for the year the investment is made regardless of the rate of tax they pay, exemption from capital gains tax on the proceeds of sale of their SEIS investment and, in relation to the 2012-2013 tax year, the ability to roll any chargeable gain made on other capital assets into a SEIS company and gain a complete capital gains exemption in respect of such disposal(s).
What effect will SEIS have?
For savvy investors who understand the fast evolving world of modern technology and its disruptive effect on traditional business models, these great tax breaks will offer brilliant returns in the future. Together with the already established Enterprise Investment Scheme and Venture Capital Trusts, SEIS can only help stimulate entrepreneurship and encourage those with capital to back small businesses, rather than just put their money in ‘bricks and mortar’ and poorly managed funds that only invest in well established public companies.
How Bargate Murray can help
Our team at Bargate Murray know a number of people with capital looking to invest in the right opportunities, while we also work for a number of high growth technology start-ups open to investment. We are also experienced at advising on, negotiating and successfully completing these types of small private company transactions and would be delighted to assist any interested party with such a deal.