VCM37040 - SEIS: income tax relief: supplementary and general: nominees and bare trustees

ITA07/S257HE

Reliefs under the SEIS may be available where an individual subscribes for shares, and holds them, through a nominee. This facilitates the use of investment funds, which enable money pooled by a number of investors to be subscribed for shares in a range of companies, the investments being held in the name of a nominee.

For income tax relief the general rule, in ITA07/S257AA, is that to be eligible for the relief an individual must subscribe for shares on his or her own behalf. But it is provided in ITA07/S257HE that shares subscribed for, issued to, held by or disposed of for an individual by a nominee are to be treated as subscribed for, issued to, etc, that individual.

The company, which may or may not know who the beneficial owner is to be, should enter the name of the actual subscriber on the form SEIS3.

Note that the exception in ITA07/S257HE does not go far enough to enable investors to obtain income tax relief if they invest in a partnership which in turn invests in shares (including a limited partnership and a limited liability partnership). This is because rather than having sole ownership of a specific allocation of shares, the individual will instead own a proportion of all the partnership assets (as will all the other partners in the partnership).