EIS - SEIS advance assurance

Assisting you with SEIS & EIS advance assurance applications

We can help you

 

If you have a script and you're looking for a production company to help you get it off the ground please do get in touch. We may be able to offer you our services and gain the project an SEIS (Seed Enterprise Investment Scheme) or EIS (Enterprise Investment Scheme) approval which will give our investors a safer investing platform.

We work with professional film accountants and solicitors who can ensure all projects we work on can get SEIS or EIS advance assurance. So, what is SEIS & EIS?

Enterprise Investment Scheme (EIS) tax breaks

The UK government set up the Enterprise Investment Scheme in 1994. Today, it offers a number of tax breaks to investors who buy shares in small, private companies:

 

  • You get income tax relief of 30 per cent. So if you invest £10,000 in a company that is eligible for EIS, you can knock £3,000 off your income tax bill in the year that you invest.

 

  • You’ll pay no capital gains tax on any profits you make from an EIS investment. So if you invest £10,000 and five years later sell your shares for £20,000, you’ll get the full benefit of the £10,000 profit, saving you at least £1,800.

 

  • If you make a loss on your investment, you can offset that loss against income tax. So let’s say you lose your entire £10,000 investment. Because of income tax relief, your actual loss is only £7,000 (£10,000-£3,000). So you can, if you choose, reduce your taxable income for the year in which you disposed of the shares by £7,000, resulting in a saving of £2,800 (40 per cent of £7,000) for a higher-rate taxpayer. If you want to offset your loss against other capital gains in the normal way, you can do this instead.

 

  • There’s no inheritance tax to pay on shares bought through EIS.

 

To be eligible for these reliefs, you generally have to hold the shares for at least three years before selling them.

Seed Enterprise Investment Scheme (SEIS) tax breaks

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.

While the maximum workforce and gross assets allowable under EIS are 250 staff and £15 million respectively, SEIS has lower limits of 50 staff and £200,000 gross assets. Businesses must also be less than two years old (there are no age restrictions under EIS).

The tax breaks are as follows:

 

  • Income tax relief is 50 per cent, not 30 per cent. So you get £5,000 off your income tax bill for investing £10,000 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. See above for details.

 

  • 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. (This was originally introduced as a temporary measure, but in the 2014 Budget, chancellor George Osborne made it permanent.)

 

The tax reliefs available through SEIS are so generous that for the 2012/13 tax year, they added up to a potential 100.5 per cent of your investment in a situation where that investment was a complete failure. In other words, you literally could not lose provided you had paid enough tax to offset your SEIS investment against.

However, for the 2013/14 and 2014/15 tax years, the downside protection has fallen 86.5 per cent – 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, of course.

The maximum you can invest through SEIS in any tax year is £100,000.

 

 

 

 

 

 

 

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Stone Empire Pictures

Film production company

London, South East England & Crawley, West Sussex

info@stoneempirepictures.com