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What can your company use the SEIS and EIS investment for?‍ In addition to these, check out a number of lesser known ways companies can qualify for SEIS/EIS. There are also a number of tests which must be satisfied before you can confidently offer your investors SEIS or EIS. A useful point to note is that companies are only excluded from raising money under SEIS and EIS, if a ‘substantial’ element (+20%) of their trade activity consists of the excluded activity. There will inevitably be some grey areas that may need further analysis. Excluded trades include those dealing in land or commodities, those involved with banking, insurance or money-lending, those providing legal or accountancy services, those involved in property development and those generating and exporting electricity. Most trades do qualify for SEIS and EIS funding, but a number are excluded from the schemes entirely.

What types of companies are eligible for SEIS & EIS? Finally, if shares are eventually sold at a loss, the investor may offset the loss against their capital gains tax. With both SEIS and EIS, there is no inheritance tax to pay on shares held for at least two years. As with SEIS, the investor will also pay no capital gains tax on any profit arising from the sale of the shares after three years. It allows an individual to invest up to £1 million per tax year and to receive a 30% tax break in return. The investor will also benefit from a capital gains tax exemption on any profits that arise from the sale of shares after three years.ĮIS, on the other hand, focuses on medium sized startups. SEIS is focused on very early-stage companies, and allows an individual to invest up to £100,000 per tax year and to receive a 50% tax break in return. The two schemes are similar, but have some important differences. Questions? Book some time in with one of our SEIS/EIS experts and we’d be happy to help. If you’re looking to raise under SEIS/EIS you can easily apply for SEIS/EIS Advance Assurance on SeedLegals. The Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS) are two of a number of UK government initiatives which encourage innovation by granting private investors a significant tax break when investing in early stage, ‘high-risk’ companies.