Autostone Group is pleased to announce it as been approved by HMRC for SEIS & EIS in which is great
TTThe Founder / CEO of Autostone is pleased to announce it has been approved by HMRC for SEIS & EIS in which is great news for the business in which it be able to offer Tax incentives to investor's who consider investing in Autostone Group as there is exciting times ahead for the Autostone model.
Tax incentive for EIS.
The Enterprise Investment Scheme (EIS) provides tax incentives in the form of a variety of income tax and capital gains tax reliefs to investors who invest in smaller, unquoted, trading companies.
The primary tax relief takes the form of a reduction in Income Tax at a flat rate of the cost of new shares.
Tax relief increased from 20% to 30% on 6 April 2011.
There is no minimum amount an investor can invest in any one company (prior to 2012/13 this was £500); however there is a maximum investment of up to £1 million from 2012/13 (£500,000 2008/09 - 2011/12).
Under SEIS, a taxpayer may invest up to £100,000 in a qualifying new start-up business and be eligible for income tax relief of 50 per cent.
A further relief is given when capital gains are reinvested into a SEIS company (see SEIS Reinvestment relief).
Relief is offered regardless of the rate at which the investor pays tax.
The SEIS applies to investment in companies, and not in unincorporated businesses or LLPs.
Investment must be in subscription to new shares issued on or after 6 April 2012.*
SEIS shares issued before 6 April 2013: start-ups should avoid purchasing potential SEIS companies from incorporated incorporation agents (e.g. companies) because the fact that the company has been owned by another company will disqualify it from relief. This error is corrected from 6 April 2013 when legislation was introduced to prevent a company from being disqualified from SEIS where it was established by a corporate formation agent before sale to its ultimate owners.
Share loss relief is available, after taking into account tax relief already given on the sale of SEIS shares at a loss.
*SEIS relief was originally to apply only for shares issued in a set period up to 5 April 2017, this was removed by Finance Act 2014.
SEIS Reinvestment relief and CGT relief
As an added incentive to encourage more people to back ‘riskier’ companies, a capital gains tax (CGT) break is also offered for investments made into the new scheme:
Capital gains may be reinvested in SEIS companies to obtain Reinvestment relief. From 2013/14 this relief is restricted to half of the gain in these years. In 2012/13 reinvestment relief was unrestricted.
Disposals of SEIS shares will be exempt from CGT after a three year qualifying period.
If the SEIS investment makes a loss, an individual will also be able to offset the capital loss against income.
What's new in SEIS?
From 6 April 2016:
All energy generation activities are excluded activities for the purpose of all tax-advantaged venture capital schemes: EIS, VCT, SEIS and SITR.
From 30 November 2015:
The list of excluded activities includes making reserve electricity generating capacity available, for example through contracted arrangements such as a Capacity Market agreement or Short Term Operating Reserve contract.
From 6 April 2015:
The list of excluded activities for SEIS and EIS includes subsidised generation of electricity involving a) contracts for difference or b) renewable sources where anaerobic or hydroelectric power is involved.
The requirement that 70% of SEIS money has to be spent before EIS or VCT shares or securities can be issued was abolished from 6 April 2015.
