{"id":457,"date":"2024-06-12T12:11:36","date_gmt":"2024-06-12T10:11:36","guid":{"rendered":"https:\/\/engagethis.co.za\/__external\/vault\/grievelombard\/?page_id=457"},"modified":"2026-02-04T13:07:18","modified_gmt":"2026-02-04T11:07:18","slug":"tax-efficient-venture-capital-schemes-for-smes","status":"publish","type":"page","link":"https:\/\/grievelombard.com\/uk\/services\/tax\/tax-efficient-venture-capital-schemes-for-smes\/","title":{"rendered":"Tax-Efficient Venture Capital Schemes for SMEs"},"content":{"rendered":"\t\t
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TAX<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Tax-Efficient Venture Capital Schemes for SMEs<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Empowering Growth, Maximising Potential: Attracting Investors, Our Priority<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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In the fast-paced business world, start-ups and Small and Medium Enterprises (SMEs) must seize every opportunity to grow. Our tax-efficient venture capital schemes are designed to help you do just that. By offering tax-efficient shares in your business, we help attract and retain investors, providing a fantastic avenue for businesses to raise funds. The UK government has initiated venture capital schemes to encourage investment in high-risk SMEs: the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Seed Enterprise Investment Scheme (SEIS):<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The SEIS is a powerful tool for startups and early-stage businesses seeking funds. With a maximum lifetime funding limit of \u00a3250,000, SEIS is an excellent option for businesses looking to get off the ground.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Enterprise Investment Scheme (EIS):<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The EIS offers attractive tax incentives for investing in more established SMEs seeking to raise funds. With a maximum funding limit of \u00a35 million per tax year and \u00a312 million in its lifetime, the EIS is an excellent option for businesses looking to expand. If your company conducts research, development, or innovation, you may qualify as a \u2018knowledge-intensive company\u2019 and be eligible for higher funding limits.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Benefits of SMEs offering these schemes:<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Attract Investment: <\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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These schemes offer significant tax reliefs to investors, making your business a more attractive investment opportunity.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Mitigation of Financial Risk for Investors: <\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The tax reliefs provided by SEIS and EIS help reduce the financial risk for investors, making them more willing to invest in high-risk start-ups and SME businesses.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Expand Investment Pool: <\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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You can attract a wider pool of investors by offering SEIS or EIS shares.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Support Business Growth: <\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The investment raised through these schemes can support your business’s growth, research and development.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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The tax relief benefits investors get from your SEIS or EIS scheme:<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Benefits<\/h4><\/th>

SEIS<\/h4><\/th>

EIS<\/h4><\/th><\/tr><\/thead>

Income Tax Relief:<\/strong><\/td>Investors can claim up to 50% income tax relief on the amount invested.<\/td>Investors can claim up to 30% income tax relief on the amount invested.<\/td><\/tr>
Dividend Tax Relief:<\/strong><\/td>No tax relief benefit<\/td>No tax relief benefit<\/td><\/tr>
Capital Gains Tax Relief:<\/strong><\/td>

No Capital Gains Tax (CGT) on any gains from the SEIS investment as long as fully subscribed shares are held for at least three years.<\/p>

Additionally, 50% CGT relief on gains from an investment in a non-SEIS company if the gains are reinvested into an SEIS-eligible company.<\/p><\/td>

No Capital Gains Tax (CGT) on any gains from the EIS investment as long as fully subscribed shares are held for at least three years.<\/td><\/tr>
Capital Gains Deferral Relief:<\/strong><\/td>N\/A<\/td>If you have a capital gain from the sale of any asset, you can defer the CGT by investing the gain into EIS shares.<\/td><\/tr>
Loss Relief:<\/strong><\/td>If a business doesn\u2019t do well and you sell your SEIS shares at a loss, you can claim SEIS loss relief.<\/td>If a business doesn\u2019t do well and you sell your EIS shares at a loss, you can claim EIS loss relief. In the same tax year or tax year before<\/td><\/tr>
Carry Back Relief:<\/strong><\/td>Tax relief can be carried back to the previous tax year if you haven\u2019t invested the maximum you\u2019re allowed under SEIS in that year.<\/td>N\/A<\/td><\/tr>
Inheritance Tax Relief:<\/strong><\/td>There\u2019s no Inheritance Tax on SEIS shares as long as they are held for at least two years.<\/td>There\u2019s no Inheritance Tax on EIS shares as long as they are held for at least two years.<\/td><\/tr>
Please note that the company, investor, and proposed investment must meet the conditions of the chosen scheme.<\/em><\/td><\/tr><\/tbody><\/table><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t