ABOUT SEIS & EIS

INCOME TAX RELIEF

Individuals who qualify may deduct an amount that is equal to tax at 30% on the amounts subscribed for eligible shares in qualifying companies from their total liability to income tax for the tax year in which the shares are issued. EIS Relief for the tax year 2015/16 is obtained at a rate of up to 30 per cent. Alternatively relief can be claimed in 2014/15 but only at 20%. The maximum investment is £500,000 per tax year. Spouses are entitled to a maximum of £500,000 each.

 

For income tax purposes (but not CGT deferral, see below), the individual does not need to be a UK resident or ordinarily resident. Income tax relief is, however, only available where an Investor has a UK income tax liability.

The amount of income tax relief cannot exceed an individual’s tax liability before other reliefs given by way of discharge of tax. Relief is normally given in the tax year in which the individual invests, although the amount invested (or part thereof) may be regarded as invested in the previous tax year if a claim is made.

CAPITAL GAINS TAX (CGT) DEFERRAL

CGT deferral enables Investors to defer capital gains by reinvesting in qualifying investments. Provided a capital gain realised (on any asset) is reinvested in new “Eligible Shares” of a “Qualifying Company” within 3 years of the disposal giving rise to the gain or not more than 1 year prior to a disposal giving rise to a gain, assessment to tax on the gain arising may be deferred until the qualifying investment is sold or otherwise ceases to qualify.

 

At this point, the deferred gain would come back into charge to tax. The legislation, conditions and anti-avoidance rules for deferral relief are broadly similar to those for EIS income tax relief.

CAPITAL GAINS TAX (CGT) DEFERRAL

CGT deferral enables Investors to defer capital gains by reinvesting in qualifying investments. Provided a capital gain realised (on any asset) is reinvested in new “Eligible Shares” of a “Qualifying Company” within 3 years of the disposal giving rise to the gain or not more than 1 year prior to a disposal giving rise to a gain, assessment to tax on the gain arising may be deferred until the qualifying investment is sold or otherwise ceases to qualify.

 

At this point, the deferred gain would come back into charge to tax. The legislation, conditions and anti-avoidance rules for deferral relief are broadly similar to those for EIS income tax relief.

PINK FLAMINGO FILMS

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We're a Film and TV Production

company based in the UK.

07956 520901

27 Old Gloucester Street

London

WC1N 3AX