What tax relief do you get under the Seed Enterprise Investment Scheme (SEIS)?

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The Seed Enterprise Investment Scheme (SEIS) is a government scheme designed to encourage individuals to invest in very early-stage, higher-risk trading companies. It is more generous than the related Enterprise Investment Scheme (EIS) because the companies are smaller and riskier. The headline benefit is Income Tax relief at 50% of the amount invested in qualifying shares, set against your Income Tax bill for the year (you cannot get back more tax than you actually owe). There is an annual investment limit per investor; this card does not contain the current cap, so check gov.uk for the exact figure before relying on it. You normally must hold the shares for at least three years; selling earlier, or the company ceasing to qualify, causes HMRC to claw back the relief. There are three further reliefs. First, CGT exemption: if you keep the shares for three years, any gain on disposal is free of Capital Gains Tax. Second, reinvestment relief: you can exempt a proportion of a separate capital gain by reinvesting it into SEIS shares. Third, loss relief: if the company fails, you can set the loss (net of Income Tax relief already claimed) against income or capital gains, which sharply reduces the downside. Who it affects: individual investors with UK Income Tax liability, typically angel investors and those backing start-ups; the company must meet strict conditions on age, size, trade, and gross assets. Worked example: you invest GBP 20,000 in qualifying SEIS shares. You receive GBP 10,000 of Income Tax relief (50%), so your effective net outlay is GBP 10,000. If you hold three years and sell for GBP 50,000, the GBP 30,000 gain is CGT-free. If instead the company fails and the shares become worthless, loss relief on the net GBP 10,000 cushions the loss further. Use the income tax and capital gains tax calculators to model your position, and confirm current limits on gov.uk.

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