Eis And Seis Schemes And Their Taxations

Question 1

What was eis designed to do

Answer 1

To help unlisted trading companies raise capital from unconnected investors by giving said investors certain tax advantages

Question 2

What relief is given and how in eis

Answer 2

A tax reducer of 30%

Max investment of 1 mill in a tax year

2 mill If investment is in kic

Applies to new shares only

Max share holding of 30% of company

Question 3

Eis question

If a person has a 20k tax liability and invests 40k in to eis what is his relief in regards to eis

Answer 3

40k x 30% = 12k

This amount will be deducted from his tax liability

Therefore he will pay tax of 8k in that tax year

Question 4

Can eis relief be carried backwards and if so for how long

Answer 4

Yes it can and can be done for 1 year

Question 5

What happens if eis shares are disposed of at profit

Answer 5

They will be exempt from cgt provided they have been held for min 3 years

Losses can offset on cgt or inc tax

Question 6

How many years does someone have to hold shares for iht business relief

Answer 6

Min 2 years

Question 7

What is an eis gross assets

Answer 7

No more than 15 mill before and 16 mill after the investment

Question 8

How old can an eis be and when does it commence

Answer 8

Be les than 7 yrs old (10 for kic)

And commences when turnover is over 200k

Question 9

Does eis have to trade in the uk

Answer 9

Yes must have a permanent establishment

Question 10

How many employees is an eis allowed to have

Answer 10

250 or 500 if kic

Question 11

What is the max amount of money are they allowed to raise in the 12 months and final total

Answer 11

5 mill in the 12 months ending on the date of the investor subscribes and 10 mill if kic

The total is 12mill and 20 mill if kic

Question 12

Name the ways eis reviled can be taken away

Answer 12

Disposal of shares within 3 years

If company ceases to be a qualifying company

If the investor receives value from the company with the period

Question 13

Can cgt gains invested to an eis be deferred

Answer 13

Yes it can and their is no upper limit on how much can be deferred

Max saving of 58%

Question 14

How can someone differing cgt claim it

Answer 14

They must be uk res

Can take place 1 year before and 3 years after the disposal

Question 15

What happens to the deferred gain when eis shares are disposed

Answer 15

It will come in to charge on disposal

Question 16

A charge on the eis share is triggered if the investor ceases to be a uk res within the 3 years unless

Answer 16

Period of non res is due to work

They come back to the uk

Question 17

What is seis

Answer 17

Help smaller companies like startups

Company must be trading for less than 2 years

Assets can’t be more than 200k

No more than 25 full time employees

Question 18

What are the tax relief fo seis investment

Answer 18

50% income tax relief

Investor can’t be connected

Not own 30% of company

Can’t invest more than 100k in a tax year

Can carry back relief for 1 year

Question 19

Can cgt be reinvested in to seis

Answer 19

Yes it can at 50% relief

Question 20

Eg for seis cgt reinvestment

50k cgt reinvested in to seis what is the exempt amount

Answer 20

25 k will be exempt for tax

Question 21

How long do eis shares need to be held for

Answer 21

Shares held for min 3 years

Question 22

Are gains made from seis exempt

Answer 22

Yes they are as long as held for min time of 3 years