What is a significant benefit for investors when using SEIS?

The option that highlights a significant benefit for investors when using the Seed Enterprise Investment Scheme (SEIS) is the provision of high-income tax relief and capital gains advantages. This scheme is specifically designed to encourage investment in small, high-risk start-up companies in the UK.

Investors in SEIS-eligible companies can claim back up to 50% of their investment against their income tax, which significantly reduces the financial risk of investing in early-stage companies. Furthermore, if the shares are held for at least three years, any capital gains realized on the sale of those shares are exempt from Capital Gains Tax. This dual benefit of substantial tax relief on income and the exemption on capital gains makes SEIS a particularly attractive option for investors looking to mitigate the inherent risks associated with investing in start-ups while also seeking potential financial returns.

The other options do not accurately capture the essence of the benefits provided by SEIS. For example, there are no guaranteed financial returns or risk-free investment opportunities in the context of investing in start-ups, as these investments inherently carry a high degree of risk. While investors do gain ownership stakes in start-up companies, the true advantages lie in the substantial tax reliefs that enhance the attractiveness of the investment, rather than merely owning shares of