New SEIS/EIS guidance from HMRC on Advanced Subscription Agreements
HMRC has provided some much-needed clarification on the EIS eligibility of ASA agreements.
The guidance is as follows:
1) The agreement must specify that the funds are an investment instrument and not a loan
2) The eventual issue of shares must be for the purposes of growing the business (as opposed to issuing shares for contractual reasons)
3) The ASA will only qualify for EIS/SEIS relief if:
– Does not permit the subscription money to be refunded under any circumstances; – Cannot be varied, canceled, or assigned; – Has no interest charge; and – Has a longstop date (expected to be no more than 6 months from the date of the agreement).
The official HMRC guidance can be found at the following links: