There are many benefits to withdrawal SEIS relief. It applies to both individual investors and start-up trading companies looking to raise finance.
The rules are also subject to change and this is where your SEIS tax specialist really earns his stripes.
However, even when all this has been completed there are clauses within the legislation that allows HMRC to withdraw or reduce SEIS relief.
This can usually happen if during the three years from the issued share date:
There are also complex rules if the investor receives something of ‘value’ from the company or from a person connected with that company within three years of the shares being issued consequently in scenarios where an investor receives something ‘insignificant’, the value is ignored.
An amount is treated as insignificant if it does not exceed £1,000 or is insignificant in relation to the amount of shares held by the investor.
Where SEIS relief is to be withdrawn, the amount of the reduction is the smaller of either:
Where the amount of relief attributable to the shares is less than tax at the SEIS rate on the original subscription, the reduction to the relief is proportionately smaller.
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