SEIS Tax Relief in 2026/27: 50% Income Tax Relief on Early-Stage Investments
How Seed Enterprise Investment Scheme (SEIS) tax relief works in 2026/27 — the 50% income tax relief, CGT reinvestment relief, loss relief, and the investment limits.
Quick answer
SEIS is designed to encourage investment in the very earliest stage of company life, and its tax reliefs reflect that risk: 50% income tax relief upfront on amounts invested (up to £200,000 a tax year), CGT-free growth on qualifying shares held three years, partial reinvestment relief against other capital gains, and generous loss relief if the investment doesn't work out — a package aimed squarely at offsetting the very high failure rate of early-stage start-ups.
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Capital gains tax calculatorThe headline 50% income tax relief
An individual investing in SEIS-qualifying shares can claim income tax relief equal to 50% of the amount invested, up to £200,000 in a single tax year, reducing their income tax bill directly (rather than just reducing taxable income) in the tax year of investment, or the previous tax year if carried back under the scheme's rules. This is a significantly higher relief rate than the equivalent EIS scheme (30%), reflecting the higher risk profile of the very earliest-stage companies SEIS is designed to support.
Reinvestment relief against other gains
Separately from the income tax relief, SEIS reinvestment relief allows up to 50% of a chargeable capital gain from an entirely different asset disposal to be exempted from Capital Gains Tax, where that gain is reinvested into SEIS-qualifying shares within the relevant time window. This is narrower than the equivalent EIS deferral relief (which can defer 100% of a gain rather than partially exempt it), but it still provides a meaningful CGT benefit on top of the income tax relief for the same investment.
Loss relief: the safety net for a very risky asset class
If a SEIS investment ultimately fails or is sold at a loss, the investor can claim loss relief on the allowable loss (broadly, the amount invested minus any income tax relief already received and minus any sale proceeds), setting it against either income tax or capital gains in the same or an adjoining tax year — whichever produces the better outcome. For higher and additional-rate taxpayers, this combination of upfront relief and downside loss relief can substantially reduce the effective amount genuinely at risk compared with the headline investment figure.
uk-eis-seis-tax-reliefCGT-free growth on qualifying shares
Where SEIS shares are held for at least three years, and both the investor and company continue to meet the qualifying conditions throughout, any gain made on eventual disposal is entirely free of Capital Gains Tax — a valuable additional benefit for the (statistically minority) of SEIS investments that succeed significantly.
Bottom line
SEIS is a genuinely generous tax relief package, but it exists precisely because the underlying investments are genuinely high-risk — the tax reliefs reduce the effective cost of investing and cushion losses, they don't remove the fundamental risk that many early-stage companies fail entirely.
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Frequently asked questions
How much income tax relief does SEIS give?
SEIS gives 50% income tax relief on the amount invested in qualifying shares, up to the annual investment limit, provided the shares are held for at least three years and the investor and the company meet the scheme's qualifying conditions.
What is the annual investment limit for SEIS?
An individual can invest up to £200,000 per tax year under SEIS and claim income tax relief on that amount, though the company itself also has its own separate lifetime funding limit under the scheme rules.
Can capital gains be deferred by reinvesting into SEIS shares?
Yes, in a more limited way than the equivalent EIS relief — SEIS offers 'reinvestment relief', which can exempt up to 50% of a chargeable gain from Capital Gains Tax where the gain is reinvested into SEIS-qualifying shares in the same or adjoining tax year, subject to the normal SEIS conditions being met.
What happens if a SEIS investment fails?
Loss relief is available if the shares are disposed of at a loss (including if the company fails entirely) — the allowable loss, after deducting income tax relief already received, can be set against income tax or capital gains, whichever is more beneficial, which significantly cushions the downside of very early-stage investing.
Are SEIS shares free of Capital Gains Tax on disposal?
Yes — provided the shares are held for at least three years and both the investor and the company met the SEIS qualifying conditions throughout, any gain on disposal is free of Capital Gains Tax, on top of the upfront income tax relief already claimed.
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