We use cookies to give you the best experience on our website. If you continue without changing your cookie settings, we assume that you consent to our use of cookies on this device. You can change your cookie settings at any time but if you do, you may lose some functionality on our website. More information can be found in our Privacy Policy.

OK

Tomasz Freier

Head of Compliance
Angels Den

Dear User,

You may have heard about the new General Data Protection Regulation (“GDPR”), that comes into effect May 25, 2018.

We would like to ensure you that your personal data is safe with us. Please read the details regarding the processing of your personal data and if you agree with the processing as described below, please click the ‘I agree’ button.

Please be informed that you can withdraw this consent at any time.

1) What data are we talking about?

We are disclosing details regarding the processing of personal data that is collected within our calls and in connection with your use of Angels Den’s platform, Websites and other functionalities of Angels Den, including those saved in cookies files.

2) Who will be the controller of your data?

Angels Den Funding Limited (hereinafter referred to as AD) will be the controller of your data (Angels Den means all entities from the Angels Den capital group, which includes Angels Den Funding Limited with its registered office in London and all entities related to it and dependent on it) and only our Trusted Partners.

3) Why do we want to process your data?

We process this data for the purposes described in our Privacy Policy, including:
- compliance with any legal requirements and obligations,
- ensuring that content from our Website is presented in the most effective manner for you,
- marketing purposes,
- providing you with our services (including the completion and support of immediate activity required to provide you with information and deliver products and/or services that you request and to deliver any contracts entered into with you), or
- as otherwise explained in this privacy policy or by any communication by us.
Where you have explicitly consented to be contacted for such purposes, we use your personal data to provide information on our new and existing products and services.

4) To whom can we transfer data?

In accordance with applicable law, we may transfer your data to entities processing it at our request, e.g. marketing agencies, subcontractors of our services and entities authorized to obtain data under applicable law, e.g. courts or law enforcement agencies - of course only if they submit a request based on an applicable legal basis. Furthermore, we will transfer your data to Trusted Partners outside the European Union – to the USA – under the EU-U.S. Privacy Shield Framework.

5) What are your rights to your data?

You have the right to request access to, correct, delete your personal data. You can also withdraw consent to processing of personal data, raise objections and use other rights granted under GDPR (i.e. right to data portability).

6) Use of cookies

We use cookies to give you the best experience on our Website. This means that we have placed cookies on your device. If you continue without changing your cookie settings, we assume that you consent to our use of cookies on this device. You can change your cookie settings at any time but if you do, you may lose some functionality on our Website. More information can be found in our Privacy Policy.

In connection with the above, I agree to the processing of my personal data by Angels Den and its Trusted Partners. I confirm that I understand that my personal data is being collected as part of my phone calls, use of AD’s online platform, Websites, and other functionalities of AD, including the data saved in cookie files. I also consent to profiling in order to allow Angels Den and its Trusted Partners the provision of better services (including for analytical purposes). Your data will only be processed on a valid lawful basis in accordance with applicable data protection laws. The processing of your personal data for marketing purposes (including statistical analysis) by AD is based on the firm's legitimate interest. The processing for marketing purposes by our Trusted Partners is only possible if we receive your freely given consent. We will also process your personal data to fulfil our contractual obligations to you as contained in AD’s Terms and Conditions of the use of our Website and services. Therefore, this data will be processed on another lawful basis – ‘contract’. We will also process your data to comply with our legal obligations for our Service (such as anti money laundering and know your customer requirements), which is also a valid lawful basis in accordance with applicable data protection laws.

Expressing this consent is voluntary and you can withdraw at any time.

If you have any doubts or questions about the use of your personal data, please do not hesitate to contact me via email. I’m happy to assist.

Tomasz Freier

Head of Compliance
Angels Den
tom@angelsden.com

EIS and SEIS Tax Reliefs in 2019 | The Complete Guide for Investors

EIS and SEIS Tax Reliefs in 2019 | The Complete Guide for Investors

What do EIS and SEIS mean? 

Private investments are the fuel that keeps the innovation engine running in a market economy. The UK Government understood that and created Tax Relief Schemes aimed to encourage investors to become part of the innovation process by diminishing the financial risks.

The Seed Enterprise Investment Scheme (SEIS) offers tax deductions to investors who choose to invest in small companies, with assets not worth more than £200,000. For larger companies, the Enterprise Investment Scheme (EIS) is available and offers similar benefits, as explained in this article.

The Seed Enterprise Investment Scheme (SEIS)

This tax relief scheme is one of the world’s most efficient schemes. Investors can claim a sum of up to 50% of the value of their investment to be deducted from the income tax, without being required to invest a lot of capital.


The SEIS tax relief scheme is extremely important for small businesses and early-stage startups. Investors are less reluctant to invest their money in an innovative idea, as they can get half of their investment back from the Government.

Conditions for Investors

  • - Regardless of the number of companies you invest in, you cannot get a tax deduction bigger than £50,000 (£ 100,000 investment) for each tax year.
  • - You cannot be associated with the company that you invest in as an employee, manager, founder etc.
  • - The shares you obtain through investment must be in your possession for at least 3 years.
  • - You cannot own more than 30% of the company you invest in.
  • - The shares you invest in must be issued no earlier than the 6th of April 2012.
  • - You must be a UK taxpayer.
  • - You cannot carry forward the tax relief.

Conditions for Entrepreneurs

- The company you invest in must be a seed-stage, recently incorporated business.

- The company must not have more than 25 employees and gross assets must not account for more than £200,000.  

What Tax Reliefs are available

Income Tax Relief

The conditions and rules for income tax relief are straight-forward. If the value of your investments in a tax year is no bigger than £100,000, you can get a deduction of £50,000. If the value of your investments is less than that, you’ll get a deduction of 50% of your investments.

Capital Gains Tax Relief

  • Disposal Relief: If you hold the assets you acquired through investments for at least three years and sell them for greater value than the one you paid for initially, you’ll be exempt from the Capital Gains Tax.
  • Deferral Relief: If you sell any assets in your possession in order to acquire shares in a company which qualifies for the SEIS scheme, you are not required to pay the Capital Gains Tax until a later date (usually when you get rid of the SEIS shares).

Capital Gains Tax Reinvestment Relief

If you made a previous investment of any kind which brought you financial gains and then you decide to reinvest them in a company which qualifies for the SEIS scheme, you will be exempt from 50% of the Capital Gains Tax.

Loss relief

This kind of relief is applicable if the investment you made does not prove profitable or the business fails. This relief also applies to the income tax. After deducting 50% of the value of your investment from it, you are normally left with the other half of your investment lost. However, through SEIS Loss relief, you can ask for another income tax deduction accounting for the percentage represents your income tax from the lost half.

Carry-back relief

If you invest in an SEIS-eligible company and you respect the requirements and rules explained above, you can apply the earned tax deduction to the income tax of a previous year. However, you must not have acquired more than £ 100,000 worth of SEIS-eligible shares in the fiscal year you want to carry-back your deduction for.

Inheritance Tax Relief

If you hold the shares of an SEIS-eligible company you invested in for more than 2 years, those shares will be inheritance tax exempt.

Examples

First of all, let's talk about the benefits that apply to your previously obtained funds, once you decide to invest them in an SEIS-eligible company. If the money were obtained through the sale of an asset, you do not have to pay the Capital Gains Tax as long as you have the SEIS shares. If you invest the money obtained from a previously successful non-SEIS investment, you only have to pay 50% of the Capital Gains Tax for the value you decide to invest.

Now, let us say you decide to invest the maximum amount of £100,000 in a recently incorporated innovative startup. The startup we are talking about is offering a new solution and attracts multiple investors, you ending up owning 20% of the company in shares.

At the end of the fiscal year, £50,000 of your income tax will be deducted. Therefore, the startup or small business you invested in will benefit from a capital influx of £100,000 and your liquid assets will only decrease with half of that. If you want, you can apply this deduction to a previous tax year.

If the investment proves to be successful and profitable and the shares you acquired for £100,000 are sold for £300,000 after a minimum of three years, there is no Capital Gains Tax to be paid for the gained capital.

If the shares are held for two years, they will be exempt from the inheritance tax.

If the investment does not prove to be successful and the business fails to bring any revenue, the £100,000 you invested is not lost in its entirety. First of all, you get £50,000 back as an income tax deduction. Second of all, you can also ask for a loss relief, accounting for the percentage that represents your income tax from the remaining amount. So, if your income tax is 50%, you will get another deduction of £25,000. Therefore, at the end of the day, a bad investment of £100,000 will only cost you £25,000.

This is a big risk reduction procedure meant to encourage investors to invest in the developing and innovative UK business environment.

Most recent SEIS opportunities on Angels Den

With only 3 months left of the current tax year, maximising EIS and SEIS allowances is at the forefront of a lot of our investors' minds. Feel free to contact one of our senior relations associates by sending an email to ir@angelsden.com if you want to find out more about tax relief and the investment opportunities on our platform.

Baanx Group is providing an alternative to traditional banking from your mobile phone. Their round is closing soon and they have only £45k left to raise.


InLet aims to be the leading provider of insurance products in both B2B and B2C sharing economy markets. The round ends in less than a week for them and they have raised almost £400k so far.


The Enterprise Investment Scheme (EIS)

The EIS tax relief scheme gives you similar advantages and benefits to the SIES scheme but targets bigger investments for more impactful business opportunities. The main point of this scheme and its most appealing advantage is 30% of the investment value deduction from the income tax.

This scheme is important for startups and businesses who need to attract higher investments. These investments usually attract bigger risks that deter investors from giving them full trust. Moreover, by giving sizeable tax deductions, the Government indirectly co-funds the investments, therefore giving more investors the opportunity to take part in the innovation process. The ones who did not have the necessary capital to spare into something they believe in can now do the same thing with fewer resources.

Conditions for investors

  • - Regardless of the number of companies you invest in, you cannot get a tax deduction bigger than £ 300,000 (£ 1,000,000 investment) for each tax year.
  • - You cannot be associated with the company that you invest in as an employee, manager, founder etc.
  • - The shares you obtain through investment must be in your possession for at least 3 years.
  • - You must be a UK taxpayer.
  • - You cannot carry forward the tax relief.
  • - You cannot acquire shares that are already listed on the market, but only newly-emitted ones.

What Tax Reliefs are available


Income Tax Relief

The conditions and rules for income tax relief are straight-forward. If the value of your investments in a tax year is not higher than £1,000,000, you can get a deduction of £300,000. If the value of your investments is lower than that, you’ll get a deduction of 30% of your investments.

Capital Gains Tax Relief

  • Disposal Relief: If you hold the assets you acquired through investments for at least three years and sell them for greater value than the one you paid for initially, you’ll be exempt from the Capital Gains Tax.
  • Deferral Relief: If you sell any assets in your possession in order to acquire shares in a company which qualifies for the EIS scheme, you are not required to pay the Capital Gains Tax until a later date (usually when you get rid of the EIS shares).

Capital Gains Tax Reinvestment Relief

If you made a previous investment of any kind which brought you financial gains and decide to reinvest them in a company which qualifies for the EIS scheme, you will be exempt from 30% of the Capital Gains Tax.

Loss relief

This kind of relief is applicable if the investment you made does not prove profitable or the business fails. This relief also applies to the income tax. After deducting 30% of the value of your investment from it, you are normally left with the remaining amount of your investment lost. However, through EIS Loss relief, you can ask for another tax deduction accounting for the percentage that represents your income tax from the lost amount.

Carry-back relief

If you invest in an EIS-eligible company and you respect the requirements and rules explained above, you can apply the earned tax deduction to the income tax of a previous year. However, you must not have acquired more than £ 1,000,000 worth of EIS-eligible shares in the fiscal year you want to carry-back your deduction for.

Inheritance Tax Relief:

If you hold the shares of an EIS-eligible company you invested in for more than 2 years, those shares will be inheritance tax exempt.

Examples

First of all, let us talk about the benefits that apply to your previously obtained funds, once you decide to invest them in an EIS-eligible company. If the money were obtained through the sale of an asset, you do not have to pay the Capital Gains Tax as long as you have the EIS shares. If you invest the money obtained from a previously successful non-SEIS investment, you only have to pay 30% of the Capital Gains Tax for the value you decide to invest.

Now, let us say you decide to invest the maximum amount of £1,000,000 in a business or startup. The company we are talking about is offering a new solution and attracts multiple investors, you ending up owning 20% of the company in shares.

At the end of the fiscal year, £300,000 of your income tax will be deducted. Therefore, the startup or small business you invested in will benefit from a capital influx of £1,000,000 and your liquid assets will only decrease with half of that. If you want, you can apply this deduction to a previous tax year.

If the investment proves to be successful and profitable and the shares you acquired for £1,000,000 are sold for £3,000,000 after a minimum of three years, there is no Capital Gains Tax to be paid for the gained capital.

If the shares are held for two years, they will be exempt from the inheritance tax.

If the investment does not prove to be successful and the business fails to bring any revenue, the £1,000,000 you invested is not lost in its entirety. First of all, you get £300,000 back as an income tax deduction. Second of all, you can also ask for a loss relief, accounting for the percentage that represents your income tax from the remaining amount. So, if your income tax is 50%, you will get another deduction of £350,000. Therefore, at the end of the day, a bad investment of £1,000,000 will only cost you £650,000.

This is a big risk reduction procedure meant to encourage investors to invest in innovative ideas and businesses which require a higher investment than the ones who fall under the SEIS requirements. This is highly beneficial for the business environment, as businesses which need high amounts of capital are having trouble in finding investors willing to risk such amounts of money.

Conclusion

These tax relief schemes are created by the UK Government in order to help startups and businesses find investors willing to risk their own funds for their success. Moreover, by offering a safety net for investors, there is a bigger incentive on their side to take a risk in order to gain revenue from innovation.

These schemes are two of the biggest incentives the UK business environment has to offer in order to grow and maintain its position as the most innovative and matured startup environment in the world.

Most recent EIS opportunities on Angels Den

With only 3 months left of the current tax year, maximising EIS and SEIS allowances is at the forefront of a lot of our investors' minds. Feel free to contact one of our senior relations associates by sending an email to ir@angelsden.com if you want to find out more about tax relief and the investment opportunities on our platform.

NextUp is a subscription video platform that showcases the true variety of the comedy circuit. With less than three weeks left in this round, they need £70k more in order to reach their minimum target.


BlockClaim is an insurtech startup aiming to solve the fraudulent motor insurance claims problem. They have just hit their original maximum target of £400k and are willing to accept a further £50k before closing the round.


TheFoodMarket.com is a platform connecting SMEs who produce or sell high quality food. They have raised £150k over their minimum funding target of £250k and have £100k left before hitting their maximum one. 


Business Agent is the UK’s first regulated alternative finance marketplace aggregator, attracting 60,000 visitors a month. With £70kleft to raise in this round, they are looking for new investments.


Eat Grub is a boundary-breaking sustainable food brand that aims to revolutionize Western food culture by introducing insects as a staple part of it. With £150k funded so far, their round is closing soon. 


Please note: The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment. Please visit the HMRC website for further information on tax relief.