EIS: general requirements: spending of SEIS money
The ‘spending of money’ requirement applied to shares issued before 6 April 2015, it was withdrawn with effect in relation to shares issued on or after this date.
If the company had previously raised money via a share issue which had qualified for relief under the Seed Enterprise Investment Scheme (SEIS), the company must have spent at least 70% of that money, as required by ITA07/S257CC (see VCM33040) before it could issue any shares in respect of which it was intended that EIS relief would be claimed.
If the company needed to raise more money than the maximum £150,000 permitted under SEIS with the intention that investors would claim under EIS in respect of any excess over that amount, the company was not prevented from raising all the funds from investors at the same time. However it would have needed to be able to demonstrate that it met the 70% requirement out of its SEIS investment and not out of other monies before the EIS shares were issued.