The Seed EIS (SEIS) offers relief on both income tax and capital gains to qualifying investors who subscribe for shares in qualifying companies. Investors can obtain 50% income tax relief on the cost of shares, on a maximum annual investment of £100,000. No capital gains tax is paid on profits earned on shares held for more than three years.
Capital gains which are realised before three years has expired, but which are reinvested into qualifying SEIS shares, are also exempt from capital gains tax.
To enter a SEIS:
1. Go to the Investments screen.
2. Select the owner(s) of the SEIS in the People panel, to the right side of the screen.
Note that if an SEIS is co-owned, the income tax relief that it provides will be split between the owners. A contribution of £40,000, for example, made jointly by the two owners, would result in income tax relief of £20,000 that would be split between the two owners. The result would be income tax relief of £10,000 per person.
3. Type: Select Seed Enterprise Investment Scheme.
4. Name: Enter a unique name for the SEIS.
5. Balance: Enter the current balance of the SEIS, as of the start of the plan.
Enter 0 if the SEIS is to be funded later through contributions (from income) or via transfers, as set under Advanced Settings.
6. Purchase Value: Enter the original purchase price for the SEIS.
Leave this field null or enter 0 if the SEIS is to be funded later through contributions (from income) or via transfers, as set under Advanced Settings.
7. Contribution: If you plan to make contributions to the SEIS, enter the annual amount of the planned contributions or set contributions as a percentage of earnings.
Specify when these contributions will begin and end by making selections on the Time panel, to the right side of the screen. Read more >>
Additional, optional settings are available under Advanced Settings.
We generally recommended that you check the Growth panel, to confirm and possibly edit the growth assumptions for the account.
If the "Use asset allocation" is ticked on the Growth panel, the growth rate will be derived from market assumptions and an combination of asset classes - an asset allocation. Check this panel to determine whether an appropriate asset mix has been selected.
In addition to making contributions from income, future investments can be deposited into an SEIS by transferring funds from other accounts within the plan. These transfers, one-off or ongoing, can be scheduled on the Transfers / Additional Contributions panel.
Where to view the income tax relief provided by an SEIS
Go to the Let's See charts.
Click the bar/year of the chart when the SEIS investment is to be made and select Detailed Info.
Click the Taxes tab.
Scroll down to the tax details for the person(s) who made the contribution.
The income tax relief provided by the SEIS investment should be shown in the line, "Tax Credits (Charity, VCT, EIS)".
First Published 02 September 2015, Release 4.0.19