The tax break scheme which has been labelled “ridiculously generous” by governement’s enterprise advisers is being encouraged to be taken up by backers of start up businesses.
As we reported yesterday, The Seed Enterprise Investment Scheme (SEIS) offers 50% income tax relief on investments of up to £100,000, while a capital gains tax holiday means tax breaks of up to 78% are available until 2014 on investments meeting the qualifying criteria. As well as this, there is also available loss relief for failed ventures which allows investors to write off more than 100% of the money put into the enterprise.
HMRC have said that there was to be no extension to the scheme, but investors can access the capital gains tax relief until April 2014 under certain circumstances as the scheme allows SEIS shares to be treated as if they were acquired in the previous year.
We urge any clients to consider the SEIS.