Tax reliefs
These need a UK company that is registered for Corporation Tax.
Enterprise Investment Incentives
The UK Government Enterprise Investment Scheme (EIS) provides relief for investors in qualifying companies, and additional relief is potentially available for investors under the Seed Enterprise Investment Scheme (SEIS) in companies that are in the earliest stages of development.
The investment must be for shares that have been fully paid up, in cash, when they are issued, and these must be full-risk ordinary shares, not redeemable with no preferential rights other than certain fixed preferential dividend rights. There are several possible benefits to investing under the EIS and SEIS:
Income Tax Relief
EIS income tax relief is claimed at 30% of the amount invested in the tax year in which the investment is made, up to £1,000,000 of investment (i.e. £300,000 of income tax relief per year).
Individuals can also claim SEIS Income Tax relief at 50% of the amount invested in the tax year in which the investment is made, up to £100,000 of investment (i.e. a maximum of £50,000 of income tax relief per year).
These reliefs can be carried back to the tax year preceding the year of investment, subject to the annual limit. The relief is given as a reduction of the investor’s income tax liability.
Shares must be held for a minimum period – usually three years.