SEIS/EIS

Deepdene SDC (DSDC (UK) Ltd) successfully applied for and obtained Advanced Assurance from HMRC that the business qualifies as an Enterprise Investment Scheme and that those investing in the company are eligible for for tax relief on their investment.

The company has made shares available to suitably qualified Investors through the Seed Enterprise Investment Scheme (SEIS) which has enabled the company to secure a long lease on its property in Dorking.

Investing into a SEIS offers a range of tax benefits, some of which are detailed below. More information on SEIS can be found on the HMRC website by clicking here.

Carry Back

Did you know that you can carry back your SEIS tax relief back to the previous tax year?

An investor may elect under ITA07/S257AB(5) to have part or all of an issue of shares treated as though acquired in the tax year preceding that in which the shares were actually acquired. This is subject to the maximum annual investment limit for that earlier year (£100,000). The SEIS rate for the earlier year is then applied to the shares treated as acquired in the earlier year and relief given accordingly. As there is no SEIS rate for periods before 6 April 2012 an election under S257AB(5) will be effective only for shares acquired in 2013-14 and later tax years.

For further information please visit the HMRC website.

Here are two examples…

Example 1
Jenny invests £20,000 in the tax year 2012-13 (6 April 2012 to 5 April 2013) in SEIS qualifying shares. The SEIS relief available is £10,000 (£20,000 at 50 percent). Her tax liability for the year before SEIS relief is £15,000 which she can reduce to £5,000 (£15,000 less £10,000) as a result of her investment.

Example 2
James invests £20,000 in the tax year 2012-13 in SEIS qualifying shares. The relief available is £10,000 as for Example 1. However his tax liability for the year before SEIS relief is £7,500. James can reduce his tax bill to zero as a result of his SEIS investment, but loses the rest of the relief available of £2,500 (£10,000 less £7,500).

Details of the company’s Advanced Assurance are available on request by interested parties.

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