Answers · UK 2025/26
What is SEIS and how much income tax relief does it give in 2026/27?
SEIS gives 50% income tax relief on up to GBP 200,000 invested per tax year in qualifying seed-stage companies (under 25 employees, gross assets under GBP 350,000). Disposal after 3 years is CGT-free. Loss relief is available against income or CGT. Advance assurance can be obtained from HMRC.
Full answer
The Seed Enterprise Investment Scheme (SEIS) is a government initiative designed to encourage investment in very early-stage UK businesses. It provides some of the most generous tax reliefs available to individual investors. Income tax relief Investors receive a 50% income tax relief on the amount subscribed for qualifying SEIS shares, up to a maximum investment of GBP 200,000 per tax year (the annual limit was doubled from GBP 100,000 from April 2023). Relief is given in the year the shares are issued, or can be carried back one tax year if the previous year has available capacity. Example: invest GBP 50,000, save GBP 25,000 in income tax. CGT exemption Gains on disposal of SEIS shares held for at least 3 years are fully exempt from Capital Gains Tax -- not just deferred, as with EIS. This is one of the most attractive features: a GBP 200,000 investment worth GBP 1M after 10 years has zero CGT on the entire gain. Loss relief If the company fails, investors can set the net loss (after deducting the income tax relief received) against other income or capital gains. At 45% income tax and 50% SEIS relief, effective downside can be very limited. CGT re-investment relief SEIS also allows 50% of the re-invested capital gain to be exempt from CGT (separate from the income tax relief). This adds further value for investors who have gains to shelter. Qualifying conditions -- the company must: -- Have fewer than 25 full-time employees at the time of investment -- Have gross assets not exceeding GBP 350,000 before the share issue -- Have been trading for fewer than 3 years -- Be a UK-incorporated company carrying on a qualifying trade (excludes property development, banking, legal/accountancy services among others) Investor conditions -- Must not be an employee of the company (a paid director is allowed if not previously connected) -- Must hold shares for at least 3 years -- Maximum 30% ownership stake Advance assurance Companies can apply to HMRC for advance assurance that a planned share issue will qualify for SEIS -- useful for fundraising and investor confidence.
Try the calculator
More answers
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.