SEED & ENTERPRISE INVESTMENT SCHEMES (S/EIS)
What is a Seed and Enterprise Investment Scheme (S/EIS)?
The Seed and Enterprise Investment Scheme (S/EIS) is designed to help smaller higher-risk trading companies, such as single purpose film companies and high-end TV drama entities to raise finance by offering a range of tax relief to investors who are looking to purchase new shares in these companies.
Who can invest in an approved SEIS venture?
A UK tax paying resident can invest up to £100,000 per tax year into SEIS companies, subject to owning up to a maximum of 30% of the share capital in the company. £150,000 is the total amount in any one company that is eligible for tax relief for all its investors. By an individual investing in an SEIS approved company they are entitled to 50% Income Tax relief in the current tax year and where applicable can also obtain further Capital Gains Tax relief of 14% in the current tax year with a potential additional benefit for the preceding year.
Who can invest in an approved EIS venture?
A UK tax paying resident can invest up to £1,000,000 per tax year into EIS companies, subject to owning up to a maximum of 30% of the share capital in the company. £5,000,000 is the total amount in any one company that is eligible for tax relief for all its investors. By an individual investing in an EIS approved company they are entitled to 30% Income Tax relief in the current tax year and where applicable can also obtain further Capital Gains Tax relief of 14% in the current tax year with a potential additional benefit for the preceding year.
How long does it take to obtain approval from Her Majesty's Revenue & Customs (HMRC) for an EIS venture?
The expected time to obtain Advanced Assurance qualification by HMRC is normally 45-90 days.
What is needed to obtain this qualification?
A full business plan with supporting financials that also includes a detailed financial risk assessment for the proposed venture.
How is investment raised for S/EIS qualifying companies?
Largely, this is done through Independent Financial Advisors (IFA's) and wealth management companies. Whereby, they present prospective investment proposals to their high net worth clients looking for a range of tax efficient investment opportunities.
For more information please visit the HMRC website.
Investors should consider carefully all of the information set out in the Information Memorandum before making an investment decision. They should consider whether an investment in the Silver Lining Media Fund (SLMF) constitutes a suitable investment in light of their personal circumstances, tax position and the financial resources available to them.
An investment into the SLMF involves a high degree of risk as funds are invested into unquoted, high risk companies, and may not be suitable for all investors. Investors should, therefore, seek advice from a stockbroker, accountant, fund manager or other independent financial adviser before making any decision to invest. Investors are also recommended to consult a professional adviser regarding their personal tax position.
The Information Memorandum should be read and considered in detail because it contains the material risk factors that the Manager and the Investment Adviser believe to be associated with an investment in the SLMF. If any of those risks occur, the financial position and/or results of any the SLMF companies could be materially and adversely affected, as could the availability of tax reliefs to investors. In such circumstances, investors may lose all or part of their investment.
Additional risks and uncertainties not presently known, or that are deemed to be immaterial, may also have an adverse effect on the SLMF. The risks described in the Information Memorandum do not necessarily include all the risks associated with investment in the SLMF.