Investments Options in the UK (EIS/SEIS)
The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are government-backed investment schemes in the United Kingdom that are designed to encourage investment in small, high-risk companies. These schemes offer tax relief to investors who invest in eligible companies, making it an attractive option for those looking to invest in start-ups and early-stage businesses.
The Enterprise Investment Scheme (EIS) is aimed at companies that are not listed on a stock exchange and have fewer than 250 employees. Under the EIS, investors can claim income tax relief of up to 30% on investments up to £1 million per tax year. In addition to income tax relief, investors may also be eligible for capital gains tax relief, and losses on EIS investments can be set against other income.
The Seed Enterprise Investment Scheme (SEIS) is a more recent scheme, aimed at even earlier-stage companies. Under SEIS, investors can claim income tax relief of up to 50% on investments up to £100,000 per tax year. As well as income tax relief, SEIS investors can also claim capital gains tax relief, and losses on SEIS investments can be set against other income.
Both EIS and SEIS investments are considered high-risk and they are not covered by the Financial Services Compensation Scheme. It's important to do your due diligence and research the company you are considering investing in, as there is a risk that you may lose all or some of your investment.
In conclusion, The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are government-backed investment schemes in the United Kingdom that are designed to encourage investment in small, high-risk companies by offering tax reliefs to investors. EIS is aimed at companies that are not listed on a stock exchange and have fewer than 250 employees, it offers income tax relief of up to 30% on investments up to £1 million per tax year. SEIS is a more recent scheme, aimed at even earlier-stage companies, it offers income tax relief of up to 50% on investments up to £100,000 per tax year. Both schemes are considered high-risk and it's important to do proper research and due diligence before investing.
