Film Investment with SEIS
Film Investment with SEIS
Film Investment with SEIS is both profitable and rewarding and represents an investment in UK PLC. UK films contribute £4.6Bn annually to the UK GDP
The information contained within this web page is designed to provide information only and does not constitute any investment , tax or legal advice or offer to invest in any fund contained therein
Film Investment with SEIS – What is SEIS
The Seed Enterprise Investment Scheme is much newer than its parent initiative, EIS, having been set up as recently as 2012.
It is very similar to EIS but designed for investing in even smaller companies, and providing even more generous tax breaks.
The maximum you can invest through SEIS in any tax year is £100,000 and Income tax relief is 50%, up from 30% under EIS. So you get £50,000 off your income tax bill for investing £100,000 under SEIS.
As with EIS, there’s no capital gains tax to pay on profits, no inheritance tax, and you can claim loss relief in the same way as EIS.
There is an extra relief called capital gains reinvestment relief. This is useful to you if you have recently paid capital gains tax on other investments. You can reclaim up to 50 per cent of the tax paid if you reinvest that money into SEIS.
The tax reliefs available through SEIS are so generous that for the 2014/15 tax years, the downside protection is 86.5 per cent – so you’ll get back £8,650 from a £10,000 investment that totally fails. This makes you actually loss £1,350 against a potential unlimited upside.
- Investors can receive initial income tax relief of 50% on investments up to £100,000 per tax year
- The individual investor can be a director of the company, but not an employee
- An individual’s stake in the company can be no more than 30%
- SEIS tax relief applies only to recently incorporated companies
- The value of the company’s gross assets (or if the issuing company is a parent, the group gross assets) must not exceed £200,000 immediately before the shares are issued.
- The company must have less than 25 full time employees
- The company must exist wholly for the purposes of carrying on a new qualifying trade. A qualifying trade will be “new” if the trade commenced less than 2 years before the shares were issued and the company did not carry on another trade at any time before the company began to carry on the qualifying trade.
- The company must carry on the qualifying trade for the three years period of the scheme.
- The maximum that can be raised under the SEIS is £150,000. This is a “lifetime” limit. Furthermore, the company must not have received any investment in the EIS or VCT schemes before SEIS shares are issued. However, the company can raise EIS or VCT funds after an SEIS round provided that at least 70% of the SEIS funds have been spent in the company’s qualifying business activity.
- The company must be unquoted when the shares are issued and there must be no arrangements for it to become quoted.
An overview of the Seed Enterprise Investment Scheme (SEIS)
Please note that since these videos were made, CGT wipe-out relief has changed. If a capital gain is realised in 2013/14 tax year and reinvested in Seed EIS qualifying shares, the chargeable gain will be 50%.i.e.14% (28% x 50%) 14% less than the normal CGT (28%) charge provided you are eligible to claim the Income Tax Relief.
This drops the downside protection from 100.5% in 2012/2013 to 86.5% in 2013/14 and 2014/15 tax years. So you’ll get back £8,650 from a £10,000 investment that totally fails if you pay enough tax to use all the reliefs. This is still an excellent buffer and greatly reduces the investment risk.
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