The Chancellor's announcement of a new incentive for investing
in shares in start-up businesses is a surprising yet welcome
relief, according to Ann Bibby, tax partner in the Birmingham
office of international accountancy firm Mazars.
New start up companies will be able to raise up to
£150,000 using the Seed Enterprise Investment Scheme which
launches on April 6 next year.
Individuals will obtain an income tax credit equivalent to 50
per cent of their investment, effectively having their money
doubled by the Government. Furthermore, if they sell an asset they
already own that realises taxable gains in 2012/13 and invest in
shares under SEIS in that year, no tax will be payable on the gain
in relation to the amount of the SEIS investment. However, the
individual investor is limited to an investment of £100,000
per year under the scheme.
Commenting on the Autumn Statement announcement, Ms Bibby said:
"Those with very long memories will recognise some similarities in
these proposals to the Business Start Up Scheme, as introduced 30
years ago by Margaret Thatcher's first Government.
"The proposed relief is very generous which is realistic and
necessary when seeking to encourage investment in new start-up
companies, which by their nature are usually high risk."