S/EIS & Benefits of investing

Let’s not kid ourselves, the reason we invest is to make more money. The UK Government is also motivated to help the eco-system grow because they do too (via Tax) however, they want you to invest in the UK economy too so they created S/EIS. HMRC Tax Relief guidelines in detail. We’ve distilled this down and provided further information on tax to educate you.

Typically all investments such as stocks and shares are subject to Capital Gains Tax. This is currently at 20%.

Meaning anytime you profit, you have to pay 20%. By investing via S/EIS you keep 20% more profits as they’re CGT exempt.

S/EIS

You can invest £200,000 Per Year in S/EIS Schemes.

Example: As an investor, you invest £100,000.

You can claim back

50% (£50,000)

of that investment as Income Tax Relief.

£150,000

This is also exempt from Capital Gains Tax.

If the Start-Up Fails (and you’re in the 45% Tax Bracket)

You get back £22,500

This would be a total of £72,500 or a loss of 27.5%.