Party Pieces
Not all friendships last forever...
EXAMPLE 1: TARGET
Film budget £750,000
Sales income £7,500,000
NET PROFIT FOR FILM £6,750,000
Investment of £10,000 for 10,000 B Ordinary Shares bought at £1 each, valued at £10 each at end of investment period
Investor must be a UK Income Tax payer to qualify for SEIS reliefs, even if only a nominal amount
Investor claims SEIS Income Tax relief worth 50% of the value of their investment (provided they paid UK Income Tax in the tax year(s) of the claim(s))
Investor does not have Capital Gains Tax liability from other investments so does not claim SEIS Capital Gains Tax reinvestment relief
Claims can be made for 2012/13 or 2013/14 tax years or split across both, provided investment made on or before 5 April 2014
Investor must be a UK Income Tax payer to qualify for SEIS reliefs, even if only a nominal amount
Investor claims SEIS Income Tax relief worth 50% of the value of their investment (provided they paid UK Income Tax in the tax year(s) of the claim(s))
Investor claims SEIS Capital Gains Tax reinvestment relief against liability from other investments at 50% of the Capital Gains Tax rate they paid if claimed for 2013/14 tax year onwards or at 100% of the Capital Gains Tax rate they paid if carried back to 2012/13 tax year
Claims can be made for 2012/13 or 2013/14 tax years or split across both, provided investment made on or before 5 April 2014
* The 50% Income Tax rate for high earners was abolished by the UK Government with effect from the 2013/14 tax year and replaced with the 45% Income Tax rate. This does not affect SEIS investors other than the Loss relief claimed by an investor paying the highest Income Tax rate may be lower than that in force at the time of investment due to changes in government policy from time to time.
** Income Tax relief of up to 50% of the value of the investment in SEIS-‐qualifying investments, provided the investor has paid at least the equivalent sum in Income Tax in the tax year of the claim.
*** Capital Gains Tax reinvestment relief equivalent to 18% of any investment for 20% Income Tax rate payers and 28% for all other Income Tax rate payers, provided the investor is liable for or paid at least the equivalent sum in Capital Gains Tax in the tax year of the claim. The rates shown are those in force in the 2012/13 tax year. The UK Government reduced the Capital Gains Tax reinvestment relief by 50% from the 2013/14 tax year onwards. However for all SEIS investments made by 5 April 2014, investors have the option to carry back the SEIS reliefs to the 2012/13 tax year, in whole or in part.
**** Loss relief would be claimed at the highest Income Tax or Capital Gains Tax rate paid by an investor in the tax year in which the loss was claimed, not the tax year claimed for the original investment. As such the current maximum rate at which Loss relief could be claimed is 45%.