For small and early stage start-up companies in the UK, Seed Enterprise Investment Scheme offers excellent tax reliefs for investors who subscribe for qualifying shares.

Client Challenge

Our client approached the Bedrock team as he had a large income tax and capital gains tax liability for the year. During discussions with the team he advised us that his son was at university studying Film Production. Our client informed us that he would be providing financial support to his son who needed to set up a film production business to sell the films he created as part of his degree course. Our client wanted to know if there was a tax efficient way whereby he could finance his son’s film production projects with a view to ensuring the creation of a sustainable business that would continue into future years.

How did Bedrock help?

The Bedrock team researched available options. Once they had established that the activity would constitute a trade, they explored the possibility of using an Seed Enterprise Investment Scheme company. There were several difficulties to overcome. The team had to find solutions to the “no employee investors” and the “no substantial interest in the issuing company” requirements. Our team structured the shareholdings of the company, the employment status of our client’s son and the investment made in such a way as to comply with the Seed Enterprise Investment Scheme requirements. Our team made an advance assurance application to HMRC before submitting the claims for tax relief.

Business Impact and Benefits

The Bedrock team’s involvement meant our client was confident his son’s company had been structured correctly to comply with UK company and tax legislation. The team were also able to successfully obtain Seed Enterprise Investment Scheme advance assurance and have subsequently secured income tax and capital gains tax relief for our client on his £100,000 investment in the start-up company.

Financial benefits

Our team saved our client £50,000 of income tax in the current year and also managed to reduce his capital gains liability by £50,000. The savings helped our client to fund his son’s university education. His son has a film production company for the future. The new company also provided a job for our client’s brother who was unemployed at the time.

Contact our team today to find out if your start-up business could benefit from Seed Enterprise Investment Scheme opportunities.

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Call us on 0115 778 8533 for a free consultation.

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