Tax Reducers (Enterprise Investment Scheme (EIS) (Must subscribe for…
Enterprise Investment Scheme (EIS)
Must subscribe for shares, issuing of new shares
Tax reducer lower of amount subscribed for shares and £1 million
Individual gives capital sum for shares in return.
Flat-rate of tax relief given at 30% (ITA 2007 s.158)
EIS company (ITA 2007 s.157) - must meet all criteria in ITA 2007 s.257 DA-DN.
Tax liability cannot be reduced to zero if reducer eliminates the tax due.
Order of Tax Reducers
Seed Enterprise Investment Scheme (SEIS)
SEIS Company - start-up company
Limit of £100000 invested
Relief given at 50% (ITA 2007 s.257AB)
Venture Capital Trust (VCT)
Subscribe for new shares it the company satisfies conditions (ITA 2007 s.261)
Maximum investment £200000, 30% tax relief (ITA 2007 s.263)
Social Investment Tax Relief (SITR)
Subscribe for shares in social enterprise
Community interest company, community benefit society or charity (ITA 2007 s.257J)
Relief the same as EIS, £1 million investment maximum at 30% relief (ITA 2007 s.257JA)
In the Proforma, they are found after the tax calculation but before the tax liability.