UK Budget extends Seed Investment Tax Relief

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Seedrs Update  |  March 13, 2013

Seedrs

Extension of SEIS CGT Relief in 2013 Budget

When the Seed Enterprise Investment Scheme (SEIS) was introduced last year, it included a number of permanent tax reliefs - including 50% of the investment back upfront through income tax relief, along with loss relief and exemption from capital gains tax (CGT) on disposal. In addition to all of this, SEIS had a one-year-only provision that exempts an investor from CGT on the sale of any asset if he or she reinvested the proceeds in an SEIS-eligible company. This relief applied only to disposals made in the 2012-2013 year.

But in yesterday's Budget, George Osborne announced an extension of the SEIS CGT reliefs into the 2013-14 tax year, marking an unexpected victory for investors and startups in the UK. Investors who make a disposal in 2013-2014 will be exempt from half the CGT they would otherwise owe if they reinvest the proceeds in SEIS-eligible startups; meanwhile, an investor who made a disposal in 2012-2013 but invests in the startup in 2013-2014 can still claim 100% CGT relief. This extension is just one more example of the priority the government has put on making the UK the best place in the world to invest in startups.

Further individual tax highlights from the 2013 Budget can be found on the HMRC website. As always, please contact your financial advisor to discuss how the SEIS reliefs may affect your personal financial situation.
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