Click me
Transcript

EIS vs SEIS

Kuber eis VENTURES Opening the door to EIS investment seis VS THE ENTERPRISE INVESTMENT SCHEME THE SEED ENTERPRISE INVESTMENT SCHEME Both products offer great income tax relief, but EIS is the king of income tax relief for large investment portfolios. A great way to get started investing as an Angel with the perks of Income Tax Relief. income tax relief 30% O 50% e.g. if an investor invests maximum per year e.g. if an investor invests maximum per year £IM £100k investor will get back investor will get back £300k £50k "carry back facility" Carry back part or all of relief to the previous year restrictions restrictions Shares must be held for 3 years from issue or actual start of trading activity Shares must be held for 3 years from issuance or start of trading Must not be connected to the company, familial Company must meet SEIS investment requirements Must not be employed by the company Must not own more than 30% of the company Did you just liquidate an investment with a large Capital Gain? Looking to keep it? The Capital Gains Tax Deferral with an EIS investment is unparalleled. CGT write off is available in smaller amounts for SEIS as well. CGT deferral relief Invest those gains in an EIS qualifying company, or companies £100,000 maximum investment annually Investment in SEIS can take place before share disposal Available from any type of previous investment Invest them 1 year prior or 3 years after the gain is realized £50,000 MAXIMUM CGT WRITE OFF TAX ANNUALLY No minimum or maximum amount for deferral No minimum holding time for the shares previous to EIS investment NO MAXIMUM CGT DEFERRAL AMOUNT Hold on and enjoy the amazing benefits of both of these great investments. capital gains tax relief 28% Hold onto your EIS/SEIS shares for at least 3 years Claim Income Tax Relief Pay NO Capital Gains Taxes when disposing of the shares A 28% TAX FREE INCENTIVE ON THESE GAINS Taking a loss is never pretty, but at least loss relief can make it palatable. This worst case scenario shows the true loss after relief. With a 50% income tax relief and a 45% income tax rate for loss relief, a SEIS is a great way to mitigate risk up to £100,000 in investments per year. The worst case scenario shows how little you are at risk below. loss relief YES YES Net loss minus income relief can be applied against income tax £100,000 maximum investment annually Must have paid sufficient income tax 50% or £50,000 income tax relief Apply against previous or current year Share disposal for a full 100% loss Investment at risk is £50,000 (after income tax relief) £1 million invested and lost £300,000 (30%) Income Tax Relief deducted Less loss relief at 45% tax rate, £22,500 £700,000 at a 45% tax relief rate £315,000 loss income tax relief maximum annually investment loss investment loss 38,5% 27,5% £385k £27,5k Estate planning is a major consideration for investing in EIS and SEIS. With NO inheritance tax payable on these schemes that qualify, your estate could be in for a major windfall. The same benefits apply to SEIS, just with a smaller investment maximum. inheritance tax relief Inheritance tax is 40% for your estate value over £325,000 Maximum Investment annually of £100,000 EIS shares must be held at least 2 years prior to death Maximum IHT benefit for qualifying shares, £40,000 100% IHT relief for those shares that qualify Shares must be held a minimum of 2 years before death No Maximum IHT limit £1M £3.2M £100K £320K over 10 years over 10 years invested annually max. benefit invested annually max. IHT relief benefit the big picture ten years of EIS and SEIS investments best case scenario invested £10M invested £IM income tax relief £3M income tax relief £500K CGT deferral used each year £2.8M £10M x 28%= £2.8M CGT saved CGT write off £140K (£500,000 x 28%) IHT savings (8 years) £3.2M IHT savings (8 years) £320K in direct tax savings or relief as CGT dies on death £9M £960K in direct tax savings If you are a High or Additional tax rate payer, using SEIS and EIS investments for tax relief and estate planning is the best option providing a significant return, in best case scenarios, not including the increase in value of your investments. Sources: https://www.gov.uk/government/publications/the-enterprise-investment-scheme-introduction https://www.gov.uk/guidance/seed-enterprise-investment-scheme-background http://www.kuberventures.co.uk/

EIS vs SEIS

shared by taylordavies8788 on Sep 27
32 views
1 shares
0 comments
Considering how to lower your tax burden, but not sure which investment scheme is right for you? The infographic below gives you a side-by-side comparison of the maximum tax relief benefits between b...

Tags

tax

Category

Business
Did you work on this visual? Claim credit!

Get a Quote

Embed Code

For hosted site:

Click the code to copy

For wordpress.com:

Click the code to copy
Customize size