Tax Comparison of VCT, EIS and SEIS

A comparison table of the pros and cons of VCT, EIS and SEIS in 2020/21.

TAX ASPECTS VCT EIS SEIS
Income tax relief 30% 30% 50%
Maximum personal investment per tax year £200,000 £1,000,000 (£2,000,000 in the case of knowledge intensive companies (KICs) invested in through EIS) for income tax relief, no limit for CGT deferral relief £100,000
Tax relief clawback 5 years 3 years 3 years
Backdating to previous tax year? No Yes, up to 100% of investment Yes, up to 100% of investment
CGT reinvestment/deferral relief No Yes, deferral for gains made up to 1 year before/3 years after EIS investment Yes, 50% for gains re-invested
Investor capital gains tax liability Nil at any time Nil after 3 years, except for deferred gains Nil after 3 years
Dividends Tax-free Taxable Taxable
IHT Business Relief No Yes, after 2 years Yes, after 2 years

For advice on any of the above investment vehicles ahead of tax year end, please contact us.

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Source: https://www.techlink.co.uk/user/knowledge/browse/investments/63859_ENTERPRISE_INVESTMENT_SCHEME/100688_Tax_Comparison_of_VCT_EIS_and_SEIS/

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