The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are UK government schemes designed to help start-ups raise capital, by offering tax relief to UK tax-paying investors who purchase such shares. The aim of the schemes are to encourage private investors to support UK innovation and stimulate the growth of the economy.
In order for investors to successfully get tax reliefs, the SPV (through which the investments are made) needs to be structured as a UK bare trust. In such a trust the eligible shares are held by a nominee (the trustee) on behalf of an individual. If you use any other structure, like an LLP or LP, HMRC would consider the shares not to be held by the individual investors directly, and thus the tax breaks will not apply.
The Syndicate Trust allows certain flexibilities:
- No limitations on the amount of investors;
- The structure can be used to include both EIS/SEIS and non-EIS/SEIS shares at the same time;
- The structure can include non-UK tax resident investors, although these will not be able to claim any tax relief.
Vauban can assist with setting up such structure, and provide a nominee entity to act as the trustee.