EIS and SEIS Tax Relief for Angel Investors UK 2026/27

The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are two of the most generous tax reliefs available to UK investors. They exist to encourage private individuals to invest in smaller, higher-risk businesses by offsetting some of the risk through significant upfront tax relief. Here is how both schemes work in 2026/27.

Enterprise Investment Scheme (EIS)

EIS allows individual investors to claim income tax relief of 30% on investments in qualifying companies. The maximum investment qualifying for EIS relief in a single tax year is GBP 1,000,000, or GBP 2,000,000 if the additional amount is invested in knowledge-intensive companies. At 30%, the maximum income tax relief is GBP 300,000 per year.

The relief is applied directly against your income tax bill for the year of investment. If you invest GBP 50,000 in EIS-qualifying shares, you reduce your tax bill by GBP 15,000. Crucially, you can only claim relief up to the amount of income tax you actually owe -- you cannot receive a refund of more tax than you have paid.

EIS Carry Back

You can elect to treat part or all of an EIS investment made in one tax year as if it were made in the previous year. This carry-back facility is useful if your income was higher in the prior year (and therefore your tax bill was larger), allowing you to claim more relief than would otherwise be available.

CGT Deferral and Exemption

EIS also provides Capital Gains Tax deferral relief. If you have realised a capital gain elsewhere and you reinvest it into EIS-qualifying shares within a specified window (one year before to three years after the gain), you can defer the CGT charge until you dispose of the EIS shares.

Better still, if you hold EIS shares for at least three years, any gain on disposal is completely exempt from CGT. This is a powerful combination: defer a gain by reinvesting in EIS, then sell the EIS shares after three years with no CGT due at all.

The standard CGT rates in 2026/27 are 18% (basic rate) and 24% (higher rate) on most assets, after the GBP 3,000 annual exempt amount.

Loss Relief

If the EIS investment fails, loss relief is available. You can set the loss (net of income tax relief received) against either your income or your capital gains. For a higher-rate taxpayer who invested GBP 100,000 (receiving GBP 30,000 income tax relief upfront), a total loss means a net outlay of GBP 70,000. Loss relief at 40% against income reduces this further, leaving an effective maximum loss of GBP 42,000 on a GBP 100,000 investment.

Seed Enterprise Investment Scheme (SEIS)

SEIS is aimed at very early-stage companies and offers even more generous relief. From 6 April 2023, the annual investment limit for SEIS was doubled to GBP 200,000 per investor. Income tax relief is 50%, giving a maximum annual tax saving of GBP 100,000.

As with EIS, relief can only be claimed up to the amount of income tax actually owed. And SEIS also provides CGT reinvestment relief: if you invest SEIS-eligible amounts in the same year you have realised a capital gain, 50% of the amount invested can be exempted from CGT (effectively reducing the CGT payable on the original gain).

SEIS shares held for at least three years are also exempt from CGT on disposal, and the same loss relief rules apply as for EIS.

Eligibility Requirements

Both schemes come with strict qualifying conditions for the company and the investor.

For companies, the key conditions include:

• The company must be unquoted at the time of investment (though AIM-listed companies qualify as unquoted for these purposes).
• EIS companies must have gross assets of no more than GBP 15m before the investment and GBP 16m after. For SEIS, the limit is GBP 350,000 gross assets and fewer than 25 employees.
• Companies must use the investment for qualifying business activities within a specified period.

For investors:

• You cannot be an employee of the company at the time of investment (directors may qualify under limited circumstances).
• You must not hold more than 30% of the company's shares or voting rights.
• EIS shares must be held for at least three years to retain the income tax relief and the CGT exemption.

SEIS and EIS cannot both apply to the same shares, but an investor can invest in both schemes in the same tax year -- just in different companies.

Advance Assurance

Companies applying for EIS or SEIS qualification can seek advance assurance from HMRC before issuing shares. This gives investors confidence that the investment will qualify. Once shares are issued, the company submits a compliance statement and HMRC issues certificates (EIS3 or SEIS3) that investors use to claim relief on their Self Assessment returns.

Practical Risks

The tax reliefs are generous but the underlying investments are high risk. Early-stage companies have a high failure rate and the money is typically illiquid for at least three years. The tax advantages should be considered in the context of the investment risk, not as a primary reason to invest. Always take independent financial advice before committing to EIS or SEIS investments.

To estimate the income tax relief available and how it interacts with your total tax liability, use the CalcHub Income Tax Calculator.