LATEST NEWS: Investors now qualify for EIS

We are thrilled to announce that Storm Digital Media Group Ltd has received advance assurance, confirming our eligibility for the government’s SEIS/EIS scheme. This significant milestone not only highlights our dedication to innovation, but also presents an incredible opportunity for potential investors. By investing in SDMG, you can enjoy generous tax reliefs while supporting our mission to revolutionise the media industry. Join us on this exciting journey as we continue to redefine the boundaries of media solutions. Together, let’s shape the future of digital media.

EIS In Bullet Points

The UK Government Enterprise Investment Scheme offers a number of tax breaks to investors buying shares in small, private companies. Further information is available via HMRC website

  • 30% Tax Relief (tax rebate) on what you invest from tax you have paid
  • Relief can be claimed against the current tax year or the previous tax year
  • No Capital Gains Tax (if disposing of shares after 3 years)
  • Capital Gains Tax Deferral on existing liabilities (if any outstanding or due for 3 years)
  • Shares Exempt from Inheritance Tax (after 2 years)
  • Tax Relief if any losses incurred (on disposal of shares) at your current personal tax rate

Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme is designed to help smaller, higher-risk companies raise finance by offering tax relief on new shares of companies that qualify. For the investor, it’s a tax-efficient way to invest in small companies.

You can invest up to £1,000,000 in any tax year and receive 30% tax relief, as long as you stay invested for at least three years. An additional £1,000,000 is eligible for the same 30% relief for investment in “knowledge-intensive” companies.

On top of that, Capital Gains Tax on EIS shares can be deferred if you reinvest the gains into an EIS-eligible company. Or – if you make a loss on your investment – you can offset the loss against your tax bill for that year or the previous year.


Seed Enterprise Investment Scheme (SEIS)

SEIS is a derivative of the Enterprise Investment Scheme (EIS) that targets younger, smaller companies to encourage seed investment. At Crowdcube, we no longer conduct raises with SEIS support, but we’ve included it here so you can stay informed.

Investors, including directors, can receive initial tax relief of 50% on investments up to £100,000 and Capital Gains Tax (CGT) exemption for half of any gain on the SEIS shares if they are reinvested into another SEIS-eligible company.

Seed investing is always riskier, so the loss relief benefit of the scheme is incredibly attractive. Like EIS, if your investment makes a loss, you can offset the loss against your tax bill for that year or the previous year.


The Benefits of Carry Back

The “carry back” facility allows investors to elect for all or part of EIS/SEIS eligible shares to be treated as though they were purchased in the previous tax year. This allows you to claim any unused tax relief from the previous year. So – if you did not claim any tax relief last year – you can double your allowance for this year by carrying it back.

The amount you can carry back is limited by your maximum allowance for that year. So if you used up all of your tax relief last year, you can’t carry anything back.

Example 1 – carrying back all of the relief

You invest £20,000 in the year 2020-2021 in EIS qualifying shares. The EIS relief available is £6,000 (30% of the £20,000 investment).

Say your tax liability from the previous year (2019-2020) is £15,000 before SEIS relief. You can carry all of the EIS relief back, reducing your tax liability to £9,000 (£15,000 – £6,000).

Example 2 – unable to use all of the relief

Again, you invest £20,000 in the year 2020-2021 in EIS qualifying shares. The EIS relief available is £6,000 (30% of the £20,000 investment).

Now, say your tax liability from the previous year (2019-2020) is lower: £5,500 before EIS relief. This time, you can reduce your tax bill to zero as a result of this EIS investment, but the rest of the relief is lost: £500 (£6,000 – £5,500).

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