SEIS & EIS Explained
Making the complicated, uncomplicated
SEIS & EIS Explained

At Raising Partners we thought we would clear a few things up around SEIS & EIS tax relief and why both are so important to your fundraising process.

SEIS

SEIS is incredibly attractive to investors because:

  • It provides them with Income Tax relief of 50% of the investment
  • A Capital Gains tax-free return on their investment
  • Is exempt from inheritance tax
  • It protects up to 82.5% of their investment if things don’t quite pan out

Applying for SEIS is not a complicated process and simply requires you to fill out a HMRC form and send it off with all your investment assets via the post. At point of writing this, this process takes HMRC approx 45 days to approve.

IMPORTANT – The two year countdown to using your SEIS assurance begins from the moment you start trading. It is crucial if you want to use this, you use it within those two years and have the funding round closed prior to the expiration of your certification. The maximum amount covered by SEIS is £150,000 meaning any investment raised after this would not be covered by the SEIS scheme, but by the EIS scheme, provided you have advanced assurance for both.

EIS

EIS is not to be ignored and requires a separate application! EIS is a big win for investors because:

  • It provides Income Tax Relief of 30% of the investment
  • A Capital Gains Tax Free return on their investment
  • Is exempt from inheritance tax
  • It protects up to 61.5% of their investment if things don’t work out

I stress once again that applying for EIS is a separate application, however this can be applied for at the same time as your SEIS assurance. Again it is not a complicated process and simply requires you to fill out a HMRC form and send it off with all your investment assets via the post. At point of writing this process takes HMRC approx 45 days to approve.
IMPORTANT – Unlike SEIS your EIS certificate will last you 7 years and covers investors up to a £1million in investment each per financial year.

Thinking of fundraising?

If you are about to embark on your fundraising process and would like to have a chat simply connect with me here or email us on workwithus@raisingpartners.com

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