In Flix Innovations [2016], A ordinary shares were issued to the company’s founders and B ordinary shares were issued to EIS investors. However, for commercial reasons, some of the A shares were turned in to non-voting deferred shares.
Can a founder claim SEIS?
A founder can qualify for SEIS. The investor (or any associate) must not be an employee of the issuing company (or any subsidiary, at any time during the period from the date the shares are issued to the third anniversary of issue.
What are SEIS shares?
The Seed Enterprise Investment Scheme (SEIS) was introduced in April 2012 by HMRC to help small, early-stage companies raise funds through individual investors by providing a series of tax reliefs on investments made into qualifying companies. SEIS companies can be invested in directly or through an SEIS fund.
Can a company buy back EIS shares?
A company buy back within an EIS company within three years of the EIS investment can cause the EIS investors to lose their relief.
Can family members invest in SEIS?
An investor does not qualify for the SEIS if he has more than a 30% stake in the company. So if your spouse, parents, children, grandchildren or grandparents have more than a 30% stake, that excludes you from SEIS, however if your sibling, cousin, aunt or uncle have a larger stake, that is fine.
Who can invest under SEIS?
SEIS: Advantages and Rules for Investors SEIS investors must be UK taxpayers to take advantage of the scheme. An individual investor can invest up to £100,000 under SEIS each tax year. He or she can’t be a company employee, but they can be a paid director.
How much can you invest in EIS?
How the schemes compare for Income Tax relief
| Scheme | Maximum annual investment you can claim relief on | Tax relief on income from dividends |
|---|---|---|
| EIS | £1 million £2 million if at least £1 million of that is invested in knowledge-intensive companies | No |
| SEIS | £100,000 | No |
| SITR | £1 million | No |
| VCT | £200,000 | Yes |
Are EIS shares exempt from capital gains tax?
Tax-free growth You normally pay no CGT when realising EIS shares, if you have claimed income tax relief on them and the companies still qualify.
