EIS, SEIS, and VCT table

Question 1

Does an EIS get IHT business relief?

Answer 1

Yes

Question 2

Does an SEIS get IHT business relief?

Answer 2

Yes

Question 3

Does a VCT get IHT business relief?

Answer 3

No

Question 4

Does a VCT get tax relief for losses?

Answer 4

No

Question 5

Does a VCT get tax free capital gains? Are there any limitations?

Answer 5

Yes they do, there are no limitations.

Question 6

Does a VCT get tax free dividends? Are there any limitations?

Answer 6

Yes they do, you are limited to £200,000 p.a.

Question 7

Does a VCT get reinvestment relief from CGT?

Answer 7

No

Question 8

Does a VCT get “carry back”?

Answer 8

No

Question 9

1. What is the Income Tax Relief for a VCT?
2. What is the minimum holding period?
3. What is it called if you do not hold for this period?

Answer 9

1. 30%
2. 5 years
3. Claw-back.

Question 10

What is the annual investment limit of a VCT?

Answer 10

£200,000

Same number as dividends

Question 11

Does an EIS get tax relief for losses?

Answer 11

Yes

Question 12

Does an EIS get tax-free capital gains? Are there any limitations?

Answer 12

Yes. It must be held for 3 years.

Same as SEIS. VCTs don’t need to be held for 3 years

Question 13

Does an EIS get tax-free dividends?

Answer 13

No

Question 14

Does an EIS get “carry back”?

Answer 14

Yes

Question 15

What is the Income Tax Relief for an EIS? What is the minimum holding period? What is it called if you do not do this?

Answer 15

• 30%
• 3 years
• Claw-back

Only difference with an SEIS is that they get 50% not 30% but same holding period

Question 16

What is the annual investment limit of an EIS?

Answer 16

£1m or £2m for knowledge intensive companies

Question 17

Does an SEIS get tax relief for losses?

Answer 17

Yes

Question 18

Does an SEIS get tax-free capital gains? Are there any limitations?

Answer 18

Yes. It must be held for 3 years.

They all get tax free capital gains. It’s just that EIS&SEIS you must hold for 3 years

Question 19

Does an SEIS get tax-free dividends?

Answer 19

No

Question 20

Does an SEIS get “carry back”?

Answer 20

Yes

Question 21

What is the Income Tax Relief for an SEIS? What is the minimum holding period? What is it called if you do not do this?

Answer 21

• 50%
• 3 years
• Claw-back

Same holding period for EIS but you get 50% relief in stead of 30%

Question 22

What is the annual investment limit of an SEIS?

Answer 22

£100,000

EIS = £1m or £2m for knowledge intensive companies. SEIS is just straight forward £100k, VCTs are £200k

Question 23

Does a EIS get reinvestment relief from CGT?

Answer 23

Yes

SEIS is 50% relief and 50% liable - VCT doesn’t get any

Question 24

Does a SEIS get reinvestment relief from CGT?

Answer 24

Yes, 50% of the reinvested amount is exempt and 50% is liable

Question 25

What do you get in EISs and SEISs that you do not get in VCTs?

Answer 25

C.R.I.L
1. Carry back available
2. Reinvestment relief
3. IHT business relief
4. Losses (Tax relief)

Reinvestment relief in SEIS on applies to 50% of the gain
Awkward question but a useful pattern to learn

Question 26

What do you get in VCTs that you do not get in EISs and SEISs?

Answer 26

1. Tax-free dividends up to £200k p.a.
2. Immediate tax-free capital gains

(EIS&SEIS you have to wait 3 years)

Question 27

Name the annual investment limits of EIS, SEIS, and VCTs

Answer 27

EIS: £1m (or £2m for knowledge intensive companies)
SEIS: £100k
VCT: £200k

Question 28

Name the Income tax relief available on an EIS, SEIS, and a VCT

Answer 28

EIS: 30%
SEIS: 50%
VCT: 30%

Question 29

How long must you hold EIS, SEIS, and VCTs to avoid clawback of tax relief?

Answer 29

EIS: 3 years
SEIS: 3 years
VCT: 5 years

Question 30

How long must you hold EIS, SEIS, and VCTs to get CGT relief?

Answer 30

EIS: 3 years
SEIS: 3 years
VCT: 0 years