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EIS - Coggle Diagram
EIS
Tax Relief
Income Tax relief at 30%
up to £1m per tax year
or £2m if knowledge intensive cos
given by deducting
from investor's tax liability
eg. £10k income tax liability
invest £20k
at 30% relief
£6000
£10k less £6k = £4k to pay income tax
can be carried back
to the previous year
if limit not being exceeded
disposals of qualifying shares
exempt from CGT
3 year rule
IHT business relief available
for shares quoted on AIM and unquoted shares
need not be resident in UK
Withdrawal of Tax Relief
on disposal w/in 3 years
except to spouse/CP
not w/drawn on death!
if company ceases to be qualifying trade
if investor receives value from co
SEIS
companies
trading <2y
assets £200k
25 employees
tax relief at 50%
up to £100,000
50% CGT exemption
CGT deferral
by reinvesting gains
under EIS
no upper limit
w/in starting 1 year before & ending 3 years
after disposal
must be UK resident
gain becomes chargeable
if ceased to be UK resident
when EIS shares are disposed
Qualifying companies
same as VCT
company must carry on qualifying trades
dealing in land, property or farming
dealing in shares or investments
banking, insurance, financial activities
legal and accountancy
leasing
ship building
provides tax advantages
for investment in unlisted companies
must subscribe for new shares
must not exceed 30% sha'holding
Income tax and CGT relief is available for losses
eg. when company defaults