15 THINGS TO BE AWARE OF ABOUT EIS AND SEIS INVESTING

  1. This calculator is only illustrative.  You may not and should not rely on the results for you personally.
  2. You have to be paying tax (either income tax or capital gains tax or both) to qualify for SEIS and EIS investment reliefs.
  3. You don’t have to be UK resident to qualify, so long as you pay UK taxes.
  4. There is a lot of paperwork in SEIS and EIS which is completed by the company.  If the tax relief is important to you, you should assure yourself that the company and the proposed share issue do qualify before investing.  Remember to keep all the paperwork relating to your SEIS and EIS investments in a safe place.
  5. You cannot claim your SEIS or EIS tax relief without holding the appropriate paper certificate to send to the taxman, which should be sent to you by the company once HMRC have agreed it qualifies. The company has to have been trading for at least 4 months before it can apply to HMRC, and HMRC may then want to check some details with the company.  So you may not be able to get your certificate to a timescale to suit you.
  6. If you do get your certificate in the tax year you invest you can send your claim in to HMRC immediately if you’re on PAYE.  Otherwise, you can send it in with your tax return.  If you get the certificate after you’ve already sent in your return, you can still send the certificate in to make a claim, any time up to 5 years after the date your tax return was due.
  7. The key date for any SEIS or EIS investment is the date the shares are issued
  8. The other dates you need to be aware of are the 31st January by which time you must file your tax return for the previous tax year and 5th April which is end of the tax year.
  9. You must be invested for at least three years to keep your tax relief, longer if it’s an EIS investment and the company wasn’t trading when you invested
  10. There are lots of complicated rules that a company must keep during the qualifying period, for you to be able to keep your tax relief. Some of these can be quite easy to break so don’t assume everything is going to be plain sailing. If the company loses its qualification the taxman may ask you to repay some or all of the tax relief you’ve had.
  11. Every new issue of shares restarts the three year clock for those shares (but not previous share issues).
  12. There are complicated rules about what qualifying for SEIS and EIS if you start to work for an SEIS or EIS company. So take advice!
  13. You should consider taking personal tax advice from a qualified tax advisor EVERY time you invest under SEIS or EIS.
  14. SEIS and EIS investing is very high risk which is why the government gives YOU a tax break.  Based on the statistical information currently available, over half, if not the majority, of investments will fail. Only invest what you can afford to lose and DO NOT rely your SEIS and EIS investments building you capital in the short, medium or long term.
  15. HMRC has more detailed information about SEIS here, and about EIS here which you might find helpful.

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Disclaimer

www.eiscalculator.com is owned and operated by Wheatfromchaff Limited (trading as Crowdrating) in the United Kingdom for illustrative purposes only.   It should NOT be relied upon by users for computation of specific SEIS or EIS tax liability in respect of any one or a portfolio of investments.
This calculator is based on the rules for SEIS and EIS in place as at January 2016.  Users should note that these rules are subject to change at any time. Whilst Wheatfromchaff Ltd will use its best endeavours to ensure that the calculator is updated if the rules change, it makes no guarantee that it will do so.
Wheatfromchaff does not accept any liability whatsoever for any direct or consequential loss however so arising, directly or indirectly, from any use of this of this or any other information or contents on this or its other websites.
Any income tax, capital gains or other tax relief will depend on personal circumstances and, if any person is unsure of his or her own potential tax liabilities or what tax reliefs may be available to him or her then he or she should seek professional advice from a qualified tax adviser. Taxation treatment depends on the individual circumstances of the investor and may change in the future.  Users accept that this is a general and illustrative calculator only and therefore may not be able to make calculations that suit your personal circumstances.
In particular the calculator does NOT take into account the following:

Potential investors are recommended to seek independent advice from an investment adviser authorised under the Financial Services and Markets Act 2000, and an appropriately qualified taxation adviser, before investing.
Investors seeking to take advantage of tax relief in prior years are encouraged to invest in such a way that they give time for an investment programme to conclude by the end of the current tax year (usually 5th April).
If you invest you may receive back less that they invested as investments may fall as well as rise in value. Investors should obtain independent advice based on their own circumstances before making investment decisions. By using this calculator you are bound by the foregoing limitations.
Neither this calculator nor any results created from it may be reproduced, redistributed or copied in whole or in part for any purpose. This calculator and any results created from it are being distributed in the UK and the European Union (EU) only and are not to be distributed in any other jurisdictions where their distribution may be restricted by law and persons into whose possession this or any other reports come should inform themselves about and observe such restrictions.
This calculator does not constitute an offer or a solicitation to buy or sell any securities whatsoever. Results from it should not be so construed, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The calculations used in this calculator are based on the current HMRC rules for SEIS and EIS investment and has been obtained from sources that Wheatfromchaff believes to be reliable and accurate.  It has been verified to the best of our ability. However, it has not been independently verified and no representation or warranty, express or implied, is made as to the accuracy or completeness of any information obtained from third parties. The calculator is subject to change without notice. The results from the calculator take no account of the investors/ individual circumstances and should not be taken as specific advice on the merits of any investment decision. Investors should consider any or all of the results published by the calculator as only a single factor in making any investment decisions.
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