EIS investments need to be held for 3 years for the tax reliefs to be retained.
What happens if you sell EIS shares within 3 years?
If you sell EIS shares within 3 years of the date they were issued (and the sale is not to your spouse or civil partner): Income Tax relief for those you sell will be wholly or partly withdrawn. it will be chargeable to Capital Gains Tax, if you make a gain on the disposal.
How long do I need to hold SEIS shares?
Both the EIS and SEIS regimes require long-term investments and there is a minimum shareholding requirement of 3 years. In general, the EIS / SEIS schemes should only be considered by sophisticated investors who are comfortable holding fairly illiquid assets for at least 3 years.
Can I sell some of my EIS shares?
As EIS shares are not usually traded on the stock market, you cannot sell them the way you would sell an investment trust. Instead, it is the managers’ responsibility to design an exit strategy that allows them to return capital and any tax-free growth to investors.
Can a company hold EIS shares?
Can companies invest into EIS opportunities? Companies are able to invest into EIS eligible companies, but the reliefs are only available to individuals. This means that anyone wishing to claim the tax reliefs offered through EIS opportunities must invest as an individual investor rather than through a company.
Are EIS gains tax free?
If you’ve no liability to Income Tax before taking account of your subscription for EIS shares, you’ll receive no Income Tax relief and any gain on the disposal of the EIS shares will be chargeable. You may be able to use your CGT AEA , £11,700 for 2018 to 2019, to cover all or part of your gain.
Is EIS capital gains tax free?
You normally pay no CGT when realising EIS shares, if you have claimed income tax relief on them and the companies still qualify.
Are EIS a good investment?
But EIS isn’t just potentially good for the investor. It’s been pivotal in ensuring start-ups in the UK can reach their potential. Under EIS, small businesses can raise up to £5million each year, and a maximum of £12million in the company’s lifetime.
When can EIS relief be claimed?
In order to qualify for EIS Tax relief, you cannot be ‘connected’ to the investee company by significant financial interest or employment. These conditions must be true for the duration of a period starting two years prior to the share issue and lasting until three years after the investment is made.
When can you claim SEIS loss relief?
If you’re issued SEIS shares in tax year 2017 to 2018, you may claim SEIS Income Tax relief as if all or part had been issued instead in tax year 2016 to 2017. You can claim reinvestment relief for the shares that are treated as issued in tax year 2016 to 2017.
What is the maximum EIS investment?
EIS is designed so that your company can raise money to help grow your business. … Under EIS , you can raise up to £5 million each year, and a maximum of £12 million in your company’s lifetime. This also includes amounts received from other venture capital schemes.
What happens if an EIS company goes bust?
– If the EIS company goes into liquidation within (generally) three years of the share issue, Income Tax relief originally given is clawed back. The amount clawed back is 30% of any value received on liquidation (up to a maximum of the relief originally given).
Can family members invest in EIS?
My understanding is that while family members are not eligible to use the EIS to reap most of the benefits, they are still able to benefit from the loss mitigation aspect of it. For example, I would like to issue equity to my husband through the EIS.
Can you transfer EIS shares?
In response to Eisy, the broad answer is that, yes, it is possible to transfer some (or indeed all) of the enterprise investment scheme (EIS) shares to the spouse without bringing the original gain back into charge.
How do I qualify for EIS?
It must be permanently established in the UK. There have to be fewer than 250 employees (500 for a KIC). Gross assets mustn’t exceed £15 million before investment and £16 million after investment. Any funds have to be used within 24 months.
What is the difference between VCT and EIS?
The EIS is designed to help these small companies raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies. The VCT scheme spreads the investment risk over a number of companies since individuals invest indirectly in a range of small companies.