The SEIS guidance on the HMRC website has been revised to include details of the amendment to the independence condition for companies in respect of any “on-the-shelf-period”. This follows on from amendments made in the Finance Act 2013 to improve the scheme.

Broadly, the company must not be controlled by another company or another company and any person connected with it; and there must be no arrangements in place for it to be controlled by another company. However, if for genuine commercial reasons a company needs to put a new holding company above itself, it may do so without investors losing tax relief subject to certain conditions. The conditions are the same as those which apply for EIS.

In addition, with effect for shares issued on or after 6 April 2013, any on-the-shelf period will be ignored when determining whether a company is or has been under the control of any other company. ‘On-the-shelf period’ means a period during which the company has not issued any shares other than subscriber shares and has not yet begun or prepared to begin trading.