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‘Risk to capital’ condition met and company was carrying on a qualifying trade

By Mark McLaughlin, September 2022

The appellant company met the seed enterprise investment scheme (SEIS) relief ‘risk to capital’ condition, its co-production of a film did not fall foul of the ‘own qualifying business activity’ condition, and there were no disqualifying arrangements to preclude SEIS authorisation.

In 2016, a company (‘SCF’) was established to conduct initial work in the production of films. Production would be undertaken by special purpose vehicles (SPVs) established for each project or film, with SCF selling the rights to the films to the SPVs.  

 In January 2015, the appellant requested advance assurance that it was a qualifying company for the purposes of the seed enterprise investment scheme (SEIS), and that any shares to be allotted were qualifying shares. On 5 March 2015, HM Revenue and Customs (HMRC) granted advance assurance.

The appellant issued: (1) 1,666 ‘B’ shares to an individual (CG) on

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