EIS and SEIS: Significant tax breaks for investors

The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are designed to encourage investment by providing several favourable tax breaks to the investor.

While the two schemes differ in the amount that can be invested, and the tax relief, an investor purchasing shares in a qualifying company can get income tax back from HMRC of up to 50% of the investment price under these government schemes.

The two schemes allow the shares invested in to be sold after 3 years free of tax, therefore the profit made during the 3-year investment can be realised tax free. Adding to this, if shares are eventually sold at a loss, the investor may offset the loss against their tax bill, plus shares held under both schemes for 2 years will be inheritance tax free.

Most trading companies qualify for these two schemes.

To find out more, please contact Fiona Cross, Tax Partner, Beavis Morgan for a no obligation discussion.

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