HMRC has recently clarified the position on the Capital Gains Tax (CGT) re-investment relief available under the Seed Enterprise Investment Scheme (SEIS).
SEIS provides investors with 50% income tax relief on their investment in qualifying companies, to a maximum of £100,000 per tax year.In addition, HMRC and HM Treasury had previously indicated that, to ‘kick-start’ this relief, CGT re-investment relief (a pound for pound exemption on chargeable gains re-invested this year) would be available for the 2012-13 tax year only.
However, HMRC has now clarified that investors can claim to treat SEIS investments made in the 2013-14 tax year, as if made in the 2012-13 tax year.This means that, practically speaking, the one year CGT relief can be extended by a further year, provided that the individual concerned has income tax to relieve and chargeable gains to exempt in 2012-13.
Clearly, the ability to claim investment reliefs in the 2012-13 tax year on investments made in the 2013-14 tax year presents investors with tax planning opportunities. In addition, it provides time for investors to consider which companies to invest in. Further information on SEIS can be found at http://www.hmrc.gov.uk/seedeis/index.htm
