An often overlooked aspect of SEIS is for founders to use this tax relief in their own company, potentially saving themselves millions of pounds in Capital Gains Tax on an exit.
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Lots of people think that SEIS isn't available to founders at all, but this is explicitly allowed in the SEIS leglisation (ITA07/S257BA).
This isn't trivial to achieve, and is usually only possible if you have 3 or more co-founders. It's easier to set this up if you are pre-incorporation, but there are ways of achieving this for existing businesses too.
This relies upon the directors being able to benefit from SEIS - if your existing company has been trading for 3 years or more then Founder SEIS will not be possible and the same arrangement can't be made under the EIS scheme.
Benefiting from SEIS tax relief does does cost a little more to achieve, but if you think your startup is going to achieve great things, you can save millions. If you don't think your startup is going to achieve great things... may be worth rethinking your plans!
Before co-founding FounderCatalyst, Sam was a founder of Roc Technologies Ltd. He used SEIS with his fellow investors to invest in his own company as a director.
Roc Technologies grew from £0 to £30m revenue in 4 years and Sam exited to private equity. The use of SEIS saved millions in CGT for each founder and sparked Sam's passion for the schemes.
Ready to secure SEIS compliance for your founder investment? FounderCatalyst manages the details, so you can focus on what matters: building and growing your business.
No credit card required.
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