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The Chartered Institute of Taxation (CIOT) has warned that entrepreneurs setting up, or investing in, companies may not be aware they could exclude themselves from access to the seed enterprise investment scheme (SEIS) by purchasing a shelf company from a corporate provider.
The institutes expressed its concerns following publication of HMRC guidance in relation to the Finance Act provisions about the SEIS.
“Denying SEIS relief for shelf companies seems bizarre and illogical,” said John Barnett, chairman of the CIOT capital gains tax and investment income sub-committee.
"Enterprise investment scheme companies are not subject to the same requirement, so why deny relief to SEIS companies? These will, by definition, be smaller start-ups, which are likely in this way to use a shelf company,” Barnett added, criticising “one of many nit-picking points that bedevil venture capital reliefs.”
