1.Section 57 extends the capital gains tax (CGT) relief for re-investing chargeable gains into seed enterprise investment scheme (SEIS) shares to gains realised on disposals of assets in the tax year 2013-14. Half the qualifying re-invested amount will be able to be set against the chargeable gains.
2.Subsection 2 amends paragraphs 1(2) and 1(3)(a) of Schedule 5BB to include within relief chargeable gains accruing to the investor in the tax year 2013-14 (as well as those accruing in the tax year 2012-13) where the investor is eligible for SEIS relief for that year; and substitutes paragraph 1(5) to provide that the amount of SEIS expenditure that can be set against the gain is 100% if the relevant year in which the gains accrue is 2012-13 and 50% if the relevant year is 2013-14.
3.Subsection 3 amends paragraph 2 of Schedule 5BB to apply the restrictions on relief to gains accruing in the tax year 2013-14 in the same way as for gains accruing in the tax year 2012-13.
4.Subsection 4 amends paragraph 5 of Schedule 5BB to deem a chargeable gain to accrue in the year in which the shares were issued (rather than the tax year 2012-13) when the amount of SEIS relief that applies to the shares is withdrawn or reduced.
5.Subsection 5 makes consequential amendment to section 150G of TCGA 1992, which introduces Schedule 5BB.
6.SEIS was introduced in 2012. It is designed to help small early-stage companies raise equity finance by offering a range of tax reliefs to individual investors who purchase new shares in these companies. It complements Enterprise Investment Scheme (EIS) but, in recognition of the particular difficulties that very early stage companies face in attracting investment, offers tax relief at a higher rate than that offered by EIS.
7.To help stimulate interest and demand in SEIS, a CGT re-investment relief was introduced for one year. Under the relief, where a person disposes of assets that give rise to chargeable gains and re-invests all or part of the amount of the gains in shares that qualify for SEIS income tax relief, the amount re-invested can be set against the chargeable gains. This is subject to a £100,000 investment limit (which matches a similar cap on SEIS relief).
8.The section extends the relief for a further year but provides that half (rather than the whole) of the re-invested amount can be set against chargeable gains.
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