EIS & SEIS

WHAT IS EIS & SEIS?

Enterprise Investment Scheme (EIS)

The benefits of EIS include:

  • Income Tax relief up to a maximum of £1m
  • 100% Capital Gains Tax exemption
  • 100% Inheritance Tax relief
  • Relief from investment losses in the event of an unsuccessful investment

Seed Enterprise Investment Scheme (SEIS)

The benefits of SEIS include:

  • Income Tax relief up to 50% of the cost of investment
  • 100% Capital Gains Tax exemption
  • 100% Inheritance Tax relief
  • Relief from investment losses in the event of an unsuccessful investment
  • SEIS builds on EIS but does not replace it

Film Tax Relief (FTR)

British film productions are subject to Film Tax Relief (FTR), on the grounds that they build and promote British culture both at home and abroad. FTR is especially friendly to independent film productions, as while it offers only 20% cash rebate on productions budgeted at over £20m, it offers 25% to those that are budgeted under £20m.

EIS Case Examples

Case 1: The company doubles its value and you hold the shares for three years

  • Investment = £10,000
  • Income Tax relief = £3,000
  • Capital Gains Tax = £0
  • Your gain = £18,200

Case 2: The company value stays the same

  • Investment = £10,000
  • Income Tax relief = £3,000
  • Share sales = £10,000
  • Your gain = £3,000

Case 3: The company closes and your shares are worth nothing

  • Investment = £10,000
  • Income Tax relief = £3,000
  • At risk capital = £7,000
  • Loss relief on at risk capital @ 45% = £3,150
  • Your actual loss = £3,850

SEIS Case Examples

Case 1: The company doubles in value

  • Investment = £10,000
  • Income Tax Relief = £5,000
  • Profit from sale = £10,000
  • Capital Gains Tax = £0
  • Tax free return = £20,200

Case 2: After three years the company’s value is the same

  • Investment = £10,000
  • Profit from sale = £0
  • Your gain = £5,000

Case 3: The company closes and the shares hold no value

  • Investment = £10,000
  • Income Tax Relief = £5,000
  • At risk capital = £5,000
  • Loss relief = £2,250
  • Your actual loss = £2,750

To learn more about how this exciting market works, click the button below to request more information or to book a relaxed call with one of our film investment advisers.