Before we move ahead with our discussion regarding some of the essential differences between EIS and SEIS stocks or shares, we need to understand what actually these shares are. To get started, EIS stands for Enterprise Investment Scheme while SEIS refers to Seed Enterprise Investment Scheme offers. Both these investment schemes are meant to provide investments to those who are willing to get started in the business world at the entry level. Apart from this, these schemes also benefit the investors in terms of the tax reliefs for them due to their investment in some enterprises of their choice. At the outset, both these schemes seem to be similar to each other however there are some important differences between the two.
Let us discuss the same in the current content:-
Difference Inapplicability
One of the most important differences between EIS and SEIS is their applicability. It means the SEIS investment scheme is clearly applicable at the start-ups or such companies that are just at the starting stage. It means you may get SEIS shares in a company that is new to the business world or is getting started with its operations right at the beginning stage. On the other hand, the EIS shares scheme is applicable to larger as well as mature companies as well. It means the EIS scheme is equally applicable in the case of small and young companies as well as big and mature companies.
Differences In The Qualifications Needed
In order to make sure that you qualify for tax relief through SEIS as an investor, it is important that the shares must be new. Also, the shares need to be paid in full and in cash to get the tax relief. In contrast to this, the EIS scheme enables you to get tax reliefs even if the shares are new and paid in the form of some assets or other forms depending upon the capability of the companies being invested in.
Differences In The Trading Period
As far as a trading period to qualify for SEIS is concerned, the company must be trading in the given field for around 2 years. On the other hand, the trading period must be around 7 years to qualify for the EIS investment scheme.
The Difference In The Extent Of Tax Reliefs
The tax reliefs that you become eligible for in the case of SEIS shares is 50% of the total amount invested. Contrary to this, the tax relief in the case of EIS shares is 30%.
This was all about the differences between EIS and SEIS shares. After getting to know about these differences, you may choose the apt option for investment purposes and go ahead with the same as per your liking and also the benefits that you expect to receive through such investments.
