Before I begin on my chosen topic this week, as a spurs fan I thought I would just give my two cents worth on the Harry Redknapp vs HMRC case. For me the decision to prosecute Harry was all for publicity, it should never have gone to court and I really hope HMRC are happy paying 8 million pounds for this type of publicity.
Moving on, I attended a cracking course last week where I found out a bit more about the new Seed Enterprise Investment scheme (SEIS). It works along the same basis as EIS scheme where you invest in a qualifying company and you get tax relief on your investment; however this new scheme seems to be offering very generous reliefs
It was introduced in the Autumn Budget statement and comes in from 6th April 2012. The new scheme is designed to encourage investment in small, early stage companies. The investor gets 50% tax relief, up to a maximum of £100,000 invested and the company is allowed to raise up to £150,000 from offering the relief.
I think this is astonishing, what is more astonishing is the fact that even if you are a basic rate tax payer you can still benefit from 50% relief.
Furthermore there is an exemption from capital gains tax on gains realised from the disposal of assets where the gains are reinvested through the new SEIS. This means that the total tax relief could reach an amazing 78% if taxable gains are reinvested into the SEIS. 50% tax relief and 28% cgt relief.
To claim the SEIS relief the investor must have received a compliance certificate from the issuing company. The company must not have more than 25 employees and not more than £200,000 gross assets and be not more than 2 years old.
Detailed final legislation on this will be included in the finance bill 2012.
In conclusion I believe this is a truly great incentive for investors to invest in UK companies and will generate a lot of interest. I am keen to see how many of my clients invest in new companies next year; however before you invest make sure you do your research about the company you are investing in!
If you have any queries or need any help with your tax please contact me mitch@ljd.uk.com
Thank you for reading my blog
Mitch the Tax Man
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