Entrepreneurs and investors

There are many incentives and reliefs within the UK tax legislation. In our experience it is apparent that the availability of these reliefs is not widely known by taxpayers. In many cases individuals and businesses may be losing out on available reliefs which could be secured with planning and the right professional help.

If the planning involving such reliefs is implemented correctly and in a timely manner substantial tax savings and deferrals can be secured with little risk of challenge from H M Revenue & Customs.

Enterprise Investment Scheme – individuals

This relief is available to individuals who invest in shares in certain qualifying companies.

The main features of the relief are:

  • Relief of 30% of the investment made
  • The relief reduces the income tax payable in the year of investment or one year prior
  • There are detailed rules on connection to determine who can invest in the company to secure EIS relief
  • Detailed rules on the qualifying activities for a company
  • No CGT is payable on the sale of shares if held for the required period
  • A host of detailed conditions – the devil really is in the detail with EIS

We have assisted many company owners wishing to secure EIS status for their company’s shares.

We have advised many individuals on personal tax mitigation with the use of EIS investments.

Seed Enterprise Investment Scheme – individuals

The SEIS relief is like EIS. However, only smaller companies which have been in existence for less than 2 years can issue shares to investors under the SEIS rules.

The main features of the relief are:

  • Relief is 50% of the investment made
  • Most of the issues are a mirror of the EIS provisions – the main distinction for SEIS relief is the size and length of operation requirements

As for EIS we have advised many companies and individuals on SEIS relief.

Entrepreneurs’ Relief – individuals

On the disposal of certain specified business assets, a reduced rate of CGT is available for those individuals who meet the necessary conditions.

The main features of the relief are:

  • The rate of CGT is 10% rather than 20%
  • Available on lifetime capital gains of up to £10 million
  • The nature of the asset being sold is important – the relief is only available for disposals of interests in trading businesses and not investment businesses or property holdings
  • There are a host of conditions which need to be met by the individual making the disposal and the business

We have advised many individuals about their entitlement to Entrepreneurs’ Relief. We have worked with many business owners to help them to structure their businesses so that the potential for Entrepreneurs’ Relief is maximised.

We have assisted clients with pre-sale planning and business restructuring to maximise the relief.

Please see the Friend Partnership Guide to Entrepreneurs and investors for further detail.