Funding is crucial to small businesses, especially during the start-up phase when overheads such as research and development or buildings and stock are high and trading income can be non-existent.

Meanwhile, successful individuals maybe looking for the most tax efficient way of investing their income. The two can come together in the form of three different schemes – Investors’ Relief (IR), Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS).

Each has a different set of qualifications and advantages dependent on the circumstances of the company and those looking to invest.

Ian Parker, Director at Whitley Stimpson (pictured above), said: “We advise companies and individuals at both ends of the spectrum on these schemes including small business owners looking to attract larger companies to invest. Firms tend to be tech start-ups and we advise them on how they can attract investment. We also advise higher net worth individuals or larger companies looking to invest in start-ups to save tax.”

What are the details of each scheme?

IR reduces the rate of Capital Gains Tax (CGT) charged on share disposals to 10 per cent, with a £10m lifetime limit. Relief is available to both individuals and trustees meeting certain conditions and shares must be held for at least three years.

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