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At a glance

The Seed Enterprise Investment Scheme (SEIS) provides tax incentives in the form of a variety of Income Tax and Capital Gains Tax (CGT) reliefs to investors who invest in small start-up, unquoted trading companies.

See our extended guide for subscribers SEIS: Subscriber Guide this contains lots of worked examples and answers many different Frequently Asked Questions (FAQs).

Income Tax Relief

SEIS Reinvestment relief and CGT relief

Loss relief

See: EIS: Enterprise Investment Scheme (subscriber guide)

What’s new?

SEIS Top FAQS

Find the answers in the SEIS subscriber guide

Overview of the SEIS

The SEIS is modelled largely on the existing Enterprise Investment Scheme, with the following key differences:

  1. There is no restriction on directors investing under the scheme, providing they meet the other investor tests.
  2. The amount that a company can raise under the SEIS is limited to £150,000 in total.
  3. Investors will not be able to claim relief until the company has spent 70% of the money raised.
  4. The company must use SEIS investment money within three years.
  5. The company may have subsidiaries.
  6. The eligibility is by reference to the age of the trade rather than the company.
  7. SEIS relief is open to past employees.
  8. From 6 April 2015, the requirement that 70% of SEIS money has to be spent before EIS or Venture Capital Trust (VCT) shares or securities can be issued was abolished.

See: Which investment relief: IR v ER v SEIS v EIS. Non-UK-domiciled individuals may consider investment via Business Investment Relief.

Qualifying investor

An investor is a qualifying investor if:

Restriction for connected individuals

Qualifying companies

A SEIS company must:

The ‘risk to capital’ condition

This measure is intended to exclude artificial investments that have no real prospect of risk from benefiting from the tax advantages of the Venture Capital (VC) reliefs. It is not designed to affect genuinely entrepreneurial start-ups.

It applies from 15 March 2018 and provides that it must be reasonable to conclude (when the shares are issued):

Links

SEIS: Subscriber Guide
Seed Enterprise Investment Scheme (SEIS): tax relief for start-ups introduced by Finance Act 2012. SEIS provides tax incentives in the form of a variety of Income Tax and Capital Gains Tax (CGT) reliefs to investors.

EIS: Enterprise Investment Scheme (subscriber guide)
The Enterprise Investment Scheme (EIS) provides tax incentives in the form of an Income Tax and Capital Gains Tax (CGT) reliefs to investors who invest in smaller, unquoted, trading companies

Updates

SEIS is found in the new Part 5a into ITA 2007 as introduced by the 2012 Finance Act.

Compliance statement form SEIS 1: A company which has issued shares on which investors hope to claim relief under SEIS must provide a Compliance Statement as (section 257ED Income Tax Act 2007).