From 6 April 2023, companies will be able to raise up to £250,000 of SEIS investment, a two-thirds increase.
SEIS is designed to encourage investment in small start-up companies by providing income tax and capital gains tax (CGT) reliefs for qualifying investors.
There are three separate sets of reliefs within SEIS that potentially deliver a significant amount of tax relief:
- Income tax relief at 50% on the amount invested
- An exemption from tax on gains made when the shares are sold
- An exemption from tax on gains rolled over against the SEIS investment, restricted to 50% of the investment
Currently, the maximum a company can raise under SEIS in any three year period up to the share issue in question is £150,000. However, it has been announced from 6 April 2023, that companies will be able to raise up to £250,000 of SEIS investment, a two-thirds increase.
For a company to qualify for SEIS, it must have gross assets (immediately before the share issue) of no more than £200,000. This is being increased from 6 April 2023 to £350,000.
The company on the date of the share issue cannot be more than two years old, but this is being extended to three years from 6 April 2023. Currently, an individual cannot invest more that £100,000 under SEIS in any tax year. This is being extended to £200,000 from 6 April 2023.