Answers · UK 2025/26
What tax reliefs does the Seed Enterprise Investment Scheme (SEIS) give?
SEIS offers 50% income tax relief on investments up to £200,000 per year in qualifying early-stage UK companies. If the investment is held for 3 years, gains are also free from CGT. Additionally, 50% of a capital gain reinvested into SEIS can be exempt from CGT. These reliefs make SEIS one of the most generous UK tax incentive schemes.
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The Seed Enterprise Investment Scheme (SEIS) is designed to encourage investment in the very earliest stage UK startups. HMRC provides multiple overlapping tax reliefs to offset the substantial investment risk. **Income tax relief: 50%** - Maximum annual investment: £200,000 per investor (from April 2023) - 50% income tax relief claimable against the year of investment (or carried back 1 year) - Must hold shares for at least 3 years **Worked example -- income tax relief** Fiona is a higher rate taxpayer with an income tax bill of £30,000. She invests £20,000 in an SEIS-qualifying startup. Income tax relief: 50% x £20,000 = £10,000 Fiona reduces her tax bill by £10,000 -- her actual outlay is effectively £10,000 for a £20,000 stake. **CGT reinvestment relief** If you have a capital gain (e.g. from selling shares or property) and you reinvest 50% of that gain into SEIS, half the original gain is exempt from CGT. Example: you sell shares making a £40,000 gain. You invest £20,000 into SEIS. The £20,000 invested qualifies for CGT exemption, saving 20% CGT = £4,000 (or 24% for residential property gains). **CGT exemption on SEIS shares** If you hold SEIS shares for 3+ years and they increase in value, any capital gain when you sell is completely exempt from CGT. **Loss relief** If the company fails and your investment becomes worthless, you can claim loss relief. After deducting the income tax relief received, the remaining loss can be offset against income or capital gains. Example: £20,000 invested, £10,000 income tax relief received. Net cost: £10,000. If company fails: Loss available for relief: £10,000 If claimed against income at 40% rate: £4,000 tax saved Effective total loss: £10,000 - £4,000 = £6,000 from a £20,000 initial investment **SEIS vs EIS** SEIS targets very early-stage companies (max £350,000 raised). Enterprise Investment Scheme (EIS) targets slightly larger companies with 30% income tax relief (not 50%). Investors can use both schemes.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.