What is The Seed Enterprise Scheme and Why Should I Want It In My Portfolio?

^{As an investor, you are probably aware of the Seed Enterprise Investment Scheme (SEIS) as it is one of the UK's most generous investment schemes when it comes to tax reliefs and incentives. However, if you are not familiar, you’re about to be!}

^{So what is the Seed Enterprise Investment Scheme?}

^{The Seed Enterprise Investment Scheme was introduced by the HMRC in 2012. The purpose of Seed Enterprise Investment Scheme is to have investors help the next generation of British businesses get off the ground, with the level of funding a company can raise under the SEIS capped at £150,000. But whilst many may know about SEIS, many do not know of its potential.}

^{Similar to its sister scheme the Enterprise Investment Scheme (EIS) with the main difference being that Seed Enterprise Investment invests in small companies and start-ups so they can get the funding they need to scale up and gain traction in their market. To be exact, Companies employ up to 25 people, with assets of up to £200k.}

^{The tax reliefs as part of the Seed Enterprise Investment Scheme are arguably the best available in the UK!}

^{With 30% income tax relief, CGT deferral relief available, Capital Gains Tax and full Inheritance Tax-exemption, the Seed Enterprise Investment Scheme tax reliefs available are considered some of the most generous available to UK investors and can provide one of the most tax-efficient ways to invest capital.}

^{The Seed Enterprise Investment Scheme tax reliefs go a step further than the Enterprise Investment Scheme tax relief as the income tax relief increases to 50% from 30%. This means that if you invested £1,000 into a SEIS-eligible company, you could immediately offset £500 from your income tax bill if you are a higher rate tax payer.}

^{Like EIS, not only will you not be subject to Capital Gains Tax when you do make a profit in your exit from the investment, but investors have the ability to effectively write off 50% of a capital gain regardless of how it was realized and by investing the capital gain into a SEIS-eligible investment opportunity.}

^{Figuring out if The Seed Enterprise Investment Scheme is for you?}

^{There is no doubt that investing in SEIS eligible companies is a much higher risk strategy than playing it safe with an investment in an established company that has been trading for years, but with high risks comes the potential for high returns. In addition, when you're investing in Seed Enterprise Investment Scheme companies, you have the potential to make a real impact and a difference by helping new ideas or technology come into existence.}

^{Of course, remember that before investing you should always do your independent research. Make sure the company you are investing in is a sector that you are comfortable with, know well or have invested in before, or have confidence in the team behind the company so that you feel you can back them confidently with your hard-earned capital.}

^{The Seed Investment Scheme is extremely popular, with over £600m of investment made into Seed Enterprise Investment Scheme opportunities in 2016 alone and its particularly generous tax reliefs the returns could very realistically be worth the risk. Whether SEIS investment funds are for you or not will depend on your individual circumstance, but if you feel confident in the opportunity after reading all the facts, what’s stopping you?}