Glossary · UK
What is Seed Enterprise Investment Scheme (SEIS)?
A government scheme offering 50% income tax relief on investments up to £200,000 per tax year in qualifying early-stage UK companies.
Full Definition
The Seed Enterprise Investment Scheme (SEIS) is a government programme designed to encourage investment in very early-stage UK companies by offering some of the most generous tax reliefs available to individual investors. SEIS is distinct from the Enterprise Investment Scheme (EIS), which is aimed at slightly larger or more established companies and offers 30% Income Tax relief. Under SEIS, an investor can invest up to £200,000 per tax year in qualifying companies and claim 50% Income Tax relief, meaning a £200,000 investment reduces your tax bill by up to £100,000, subject to having sufficient tax liability. Shares must be held for at least 3 years for the relief to be retained. Additional benefits include: full CGT exemption on any gain when the shares are eventually sold (after the 3-year holding period), CGT reinvestment relief (gains from other assets can be sheltered by reinvesting into SEIS shares), and loss relief if the company fails (the loss, net of income tax relief, can be offset against income or gains). To qualify, companies must be UK-based, trading, have fewer than 25 full-time equivalent employees, and gross assets of no more than £350,000 at the time of investment. SEIS is particularly attractive for angel investors willing to accept the high risk that comes with very early-stage ventures.