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Could you be eligible for considerable tax relief under the Seed Enterprise Investment Scheme (SEIS)? Here’s how Hallidays helped a client and their investors to make the best use of their £150,000 investment in this interesting scheme...
£150,000 invested between two investors under the SEIS sold prior to the year-end per investor for new companies provided £75,000 income tax relief (50%).
One half of up to £100,000 gains per person on other assets are exempt from Capital Gains Tax rate i.e. 14% making effective valuation 28%.
If the project is successful, all proceeds of the SEIS investment are exempt from Capital Gains Tax.
If the project is unsuccessful, investors receive income tax relief of up to 45% of the £75,000 not already recouped. A total tax relief of £129,750 for the £150,000 investment.
Research and Development will attract an extra 130% tax relief.
This means that every £100 of expenditure will potentially save £46.00 tax rather than the normal £20.
The company was able to enter the new patent box scheme so profits in the future could have a tax rate as low as 10%.
Our client had developed a sports-related invention and required cash flow projections for the development of his new business. They had two potential investors looking at the project with £150,000 available to invest. Upon completion we had set out a potential solution that produced excellent benefits to our client and their investors.
The release of additional capital will allow the company to reinvest in the business and develop it further. The directors have the confidence to move forward without the added stress financial restrictions can bring to a business. If you are looking for investment, call us to discuss your options on 0161 476 8276.