Finance Act 2013

Finance Act 2013

2013 CHAPTER 29

Introduction

Section 56: Seis: Income Tax Relief

Summary

1. Section 56 makes a minor amendment to the legislation relating to the calculation of income tax liability where Seed Enterprise Investment Scheme (SEIS) relief is in point, and amends the SEIS independence requirement at section 257DG(2) ITA 2007 to prevent the disqualification of “off the shelf” companies established by a corporate formation agent.

Details of the Section

2. Subsections 2 and 3 make minor amendments to sections 29 and 32 of ITA, to clarify how income tax liability is to be calculated in certain circumstances where SEIS relief has been given. These amendments take effect for the tax year 2013/14 and subsequent tax years.

3. Subsection 4 amends the independence requirement at section 257DG(2) ITA, in respect of shares issued on or after 6 April 2013. It does so by introducing the concept of an “on the shelf period”, during which a company will not be disqualified by virtue of being under the control of another company. The “on the shelf period” is the period during which a company has issued only subscriber shares and has not yet commenced any trade or business.

Background

4. SEIS aims to incentivise the provision of equity capital to early stage unquoted companies which are carrying on or preparing to carry on qualifying trading activities. It does so by providing a range of income and capital gains tax reliefs for individual investors who subscribe for shares in companies which meet the requirements of the scheme.