Investment Reliefs 2019/20
|Annual investment limits||2019/20||2018/19|
|Individual Savings Account (ISA)|
|– Overall limit||£20,000||£20,000|
|– Lifetime ISA (LISA)||4,000||4,000|
|Enterprise Investment Scheme (EIS)||2,000,000||1,000,000|
|Seed EIS (SEIS)||100,000||100,000|
|Venture Capital Trust (VCT)||200,000||200,000|
|Social Investment Tax Relief (SITR)||1,000,000||1,000,000|
- ISA investors can invest in any combination of cash or shares, up to the overall limits shown. The £4,000 LISA limit is part of the general ISA limit of £20,000, not additional to it.
- Taxpayers aged between 18 and 40 may open a LISA and invest up to £4,000 each year, which qualifies for a 25% Government bonus on amounts invested up to the age of 50.
- This benefit is retained as long as the money is either
- put towards a first home costing up to £450,000, or
- kept in the account until reaching age 60, or
- withdrawn after being diagnosed with a terminal illness.
- If the money in a LISA is withdrawn in other circumstances, the bonus will be clawed back with an additional 5% charge.
- Junior ISA, with an investment limit of £4,368 (2018/19: £4,260), is available to those aged under 18 and who don’t have a Child Trust Fund account. At age 18, their junior ISA becomes an adult ISA.
- Amounts invested above £1m in the EIS must be in ‘knowledgeintensive’ companies.
- EIS, VCT and SITR investments attract 30% Income Tax relief, but those schemes all have different qualifying rules.
- SEIS investments attract 50% Income Tax relief.
- Where the disposal proceeds from any capital gain are reinvested under EIS or SITR in the four-year period that starts one year before the date of the gain, all or part of the original gain can be deferred.
- Gains reinvested under SEIS, within the same tax year, up to the investment limit attract 50% exemption from CGT.
- Investments made under EIS, SEIS and SITR can be carried back to be treated as made in the previous tax year, subject to the investment limits.
- Disposals of investments acquired under EIS, SEIS, SITR or VCT are exempt from CGT if investment conditions have not been broken.