Income Tax Act 2007 section 257BA

The no employee investors requirement

Section 257BA restricts SEIS income tax relief by preventing investors (or their associates) from being employees of the issuing company or its qualifying subsidiaries during period B.

• Neither the investor nor any associate of the investor may be an employee of the issuing company or any qualifying subsidiary during period B.
• A person who serves as a director of the company is not treated as an employee for the purposes of this restriction.
• The restriction covers employment with both the issuing company itself and any of its qualifying subsidiaries.
• Director status provides an exception — an investor or associate can be a director without breaching this requirement.