What tax reliefs are available?
To stimulate and support entrepreneurship, HMRC offers two tax incentive schemes for UK taxpayers who invest in qualifying early-stage and growth-focused businesses which have permanent establishments in the UK. Many of the businesses that work with Seedrs qualify for one of the following two schemes:
Seed Enterprise Investment Scheme (SEIS) – This scheme encourages investment in qualifying seed-stage companies by providing investors with 50% of their investment back in income tax relief. Also, any gain arising upon the disposal of shares may be exempt from capital gains tax, and loss relief is available if the disposal results in a loss.
Enterprise Investment Scheme (EIS) – This scheme is designed to encourage investment in slightly later-stage companies by providing investors with up to 30% of their investment back in income tax relief.
Investors can also defer any capital gains tax on gains which are reinvested in SEIS or EIS eligible shares, gains arising on the disposal of the shares may be exempt from capital gains tax, and loss relief is available if the disposal results in a loss.
Take a look at our UK Tax Relief Guide for a slightly more in depth analysis.
Both schemes are only available to investors who are qualifying UK taxpayers. Tax treatment depends on individual circumstances and is subject to change in future. Please note that Seedrs is unable to provide tax advice, so if you would like to learn more about how to best take advantage of available tax relief please get in touch with a professional adviser.