“The extension for a further year of the CGT relief on gains reinvested into SEIS qualifying shares (albeit at half the level for 2012/2013) will be welcome by new small companies looking for an injection of kick-start funds”.
Yvette Nunn continued:
“It is also good to see that the drafting error which denies SEIS relief where the investment is in a company that was formed by a corporate formation agent is being corrected for share issues from April 2013. The puzzle is why the error could not have been corrected when it came to light or indeed why the change could not now be backdated to April 2012. Some small companies have been denied access to vital funds in 2012/2013 because of the error.”
Notes to Editors
- The Seed Enterprise Investment Scheme provides Income Tax relief on qualifying investments by individuals into small and typically newly formed limited companies. In addition it gives CGT exemption on the eventual disposal of shares. For 2012/2013, there was an extra incentive – full relief from CGT on gains made in the year and reinvested under SEIS. That incentive is now being extended into 2013/2014 although for that year only half the reinvested gain will qualify for relief.