Picture of angels ? More SEIS and Angels
Moving higher up the risk spectrum we have reached the Seed Enterprise Investment Scheme (SEIS), which was introduced in 2011. This is for even smaller and earlier stage start-up companies that are less than 2 years, with lower limits of staff to 50 and far lower gross assets at £200,000. The SEIS Tax breaks are more generous than VCT and EIS but is it enough?
In return for where only angels fear to invest the Income tax relief is 50%, so you get £5,000 off your income tax bill for investing £10,000 but you can invest up to £100,000 through the scheme per annum. Like EIS here’s no capital gains tax to pay on profits, no inheritance tax, and you can claim loss relief in the same way. Its only VCT that can give tax free dividends. To claim the Tax relief the company needs to send you a form SEIS 3. These tax reliefs will be withheld, or withdrawn, if company does not follow the rules for at least 3 years after the investment is made.
The latest available stats it shows since SEIS was launched in 2012 to 2016, 6,665 individual companies have received investment through the scheme and £621 million in investment has been raised. Investments of over £25,000 contributed 61% of the total amount of SEIS investment raised on which claims were made. The year or year growth has already peaked and likely to decline unless the tax relief is improved to compensate for the higher comparative risk to the larger EIS and VCT qualifying companies.
Open SEIS Funds
Jenson – A general fund
Symvan – Technology fund
Portillion Capital – Ethical fund
Kuber Ventures – A discretionary access platform investing in a wide range
Deepbridge – Technology, renewals, life sciences
Start-up Funding Club – Early stage
Sapphire – Pro-active general fund
SEIS Funds diversify the investment risk of having ‘all golden but fragile eggs in one basket’ the alternative is direct investments into companies…….. to be continued…..