Seedrs Update  |  March 13, 2013

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.