On Friday the new Chancellor, Kwasi Kwarteng, announced a series of measures aimed at boosting economic growth as part of the Growth Plan 2022 (also being referred to as a “mini-budget”). These include key changes to the Seed Enterprise Investment Scheme (SEIS) from April 2023, as follows:
- Companies will be able to raise up to £250,000 of SEIS investment (a two-third increase from the current limit of £150,000);
- The gross asset test for companies will be increased from the existing limit of £200,000 to £350,000;
- The requirement for qualifying trades to have been carried on for less than two years will be extended to three years;
- The annual investor SEIS limit will be doubled to £200,000.
The Government has also confirmed that, alongside the SEIS regime, the Enterprise Investment Scheme (EIS) and Venture Capital Trusts regime will be extended beyond their current April 2025 sunset provisions (further details on the extension are to be confirmed).
As a reminder, the EIS/SEIS schemes offer significant tax reliefs to investors who are UK tax payers in respect of qualifying investments, including:
- Income Tax relief up to 30% for EIS or 50% for SEIS;
- 100% Capital Gains Tax exemption on disposal of qualifying shares;
- 50% Capital Gains Tax relief for chargeable gains reinvested into qualifying shares;
- Inheritance Tax exemption on death;
- Income Tax loss relief.
We regularly advise investors and investee companies on SEIS/EIS investments – please do not hesitate to get in touch if you would like to discuss further.