Written by Ed Prior, Head of Investor Services at SFC Capital.
To casual observers, the final budget outcomes appeared a pale ale version of what was threatened by the new Government. To seasoned financial advisors, the body blows hidden beneath the clothes made it a painful day for clients seeking to protect assets and preserve wealth.
By now, we all know the various tax changes that make life harder for wealth creators and the wealthy in this country. So, I won’t rehearse old news with you here, except to briefly highlight CGT increases, pension taxes, offshore trust exposures to IHT, and relief cuts from AIM shares. I could go on. The bottom line is it’s harder than ever to protect wealth, whether earned or inherited.
Instead of wallowing, however, now is the time for action. This is when the good become great, and the explorers get exploring. It’s time for advisors to discover mitigations and find the new opportunities available to your clients.
So here’s the secret: SEIS is the new black. Nowhere else will you find a more generous tax planning tool, a unique investment vehicle that gives tax benefits unattainable elsewhere. And that’s before we get into the upside potential of investing in Britain’s leading innovation-led startups in the very sectors that will define the next 10 and 20 years of global competition and wealth creation.
So, what is SEIS, and why is it now foremost in the savvy IFA toolkit? Here’s a quick breakdown for you: SEIS is a tax relief investment scheme that reward investors with significant benefits for investing in early-stage startups, either directly or via SEIS
Fund Managers who invest portfolios of companies for you:
- Up to 50% income tax relief.
- Up to 50% capital gains re-investment relief.
- 100% inheritance tax relief.
- 100% CGT relief on profits from selling your SEIS shares.
- Loss relief at your marginal tax rate on the remaining 50% of the investment not originally claimed for.
Oh, and you can even carry back the tax relief to the previous financial year, meaning multi-year reductions in tax liabilities. Oh, and one more thing: you can invest up to £200,000 with SEIS EACH year.
Sound too good to be true? Think again. Almost 10,000 high net worths are currently taking advantage of this scheme each year. And the savviest of advisors have been using it for a while now – are you? If not, why not?
The trick with SEIS investing is finding the right investment partner with a track record of delivering results and the right processes to make your life easy as an advisor. So, what should you be looking for in an SEIS Fund?
- Experience investing in the SEIS market.
- Access to the top tier of early-stage innovation-led companies.
- Infrastructure to deliver a smooth investor, and advisor (!), experience.
- Transparency in proven track records without hidden costs.
I’ve chosen to ignore the option you have to invest directly into single companies because why would you? Successful early-stage investing is all about access, skill, and portfolio building. You aren’t paid for developing the necessary relationships with the best universities, venture builders, and accelerators. And you don’t have time to review hundreds of startup decks to land upon he needles in the haystack needed to build successful portfolios.
That’s what we’re here for. We don’t just know SEIS investing; we set the standards others seek to emulate today. Winning the Best SEIS Fund Manager awards for the past four years is one thing, delivering the most exits by a country mile – 18 so far – is another. And building our own proprietary platform that gives investors and advisors a full spectrum view of their portfolios in real-time is the cherry on top.
So allow me to introduce you to SFC Capital, and stick with me as I show you why this is the place to leverage SEIS and maximise opportunity for your clients.
SFC began 11 years ago, incubating and making our first investment in a fledgling startup created by three university students – Onfido. Skip forward to 2024, and that business just delivered the largest tech exit in Britain for a good few years.
That’s what got us started, and since then, we have become the UK’s most active early-stage investor, with an ever-growing portfolio of companies across innovation-led sectors of the future. Diversity lies at the heart of our investing strategy, as it should at yours too. We invest across the innovation economy, in sectors like Climate Tech, BioTech, MedTech, B2B Software, Al, and more. That’s because, in a world of perpetual change, spreading risk across high-growth sectors and capturing multiple market opportunities concurrently is the best way to uncover gems in each portfolio.
Outcomes are always the most important part of investing. However, for a busy advisor, investor experience is also paramount to a successful endeavour. This is why we spent years developing a unique model. With our bespoke platform and team dedicated to supporting advisors, we are at the forefront of delivering smooth, convenient, transparent experiences for the many advisors we already work with today.
So, here is my appeal to you, dear reader. It’s time to uncover the potential of SEIS for you and your clients. When you do, choose the SEIS Fund Manager that’s most experienced and trusted by more investors than any other. At SFC, we deploy four SEIS Funds each tax year, allowing you to invest anytime. And, like many of our current IFAs, choosing to also invest in our All-Start ElS Follow-on Fund, gives you the security of knowing that, in the tax-efficient investing space, there is only one platform you need to manage everything for your clients effectively: SFC Capital.
My name is Ed Prior, and I am SFC’s Head of Investor Services. It’s my job – and my team’s – to make your life easy. I would be delighted to speak with you about our market-leading SEIS Fund, ElS Follow-on Fund, and the opportunities in SEIS and ElS investing. Please feel free to reach out to me using the contact details below, and together, we can start taking action to help you and your clients seize new opportunities in a post-budget world.
Ed Prior, Head of Investor Services at SFC Capital, edp@sfccapital.com
Tax benefits are subject to individual circumstances. Subject to changes.
