A CONSIDERED RESEARCH PROCESS
Business→Terms→Risk→Advice

Understand each part before considering the whole.

Capital at risk. This is general educational information, not personal tax or investment advice. Conditions apply to every relief. Always check current rules and seek independent advice.

Income tax relief

The headline income tax relief rates are 30% for EIS and 50% for SEIS. The amount you can claim is limited by qualifying investment, your UK income tax liability and the relevant scheme rules.

Annual limits

HMRC guidance lists an annual EIS limit of £1 million, or £2 million where at least £1 million is invested in knowledge-intensive companies. The SEIS annual limit is £200,000. Check the latest official guidance before relying on any figure.

Capital gains tax

Gains on qualifying EIS and SEIS shares may be exempt when the required income tax relief has been received and retained and the minimum holding period has been met. EIS deferral relief and SEIS reinvestment relief apply to existing gains under different rules.

Loss relief

Eligible losses can be reduced by relief against income. The eligible loss is normally calculated after accounting for income tax relief already given. The outcome depends on your tax position and cannot be guaranteed.

Claiming relief

You generally need the appropriate EIS3 or SEIS3 certificate, or an EIS5 for certain funds. Follow HMRC’s claim process, retain your documentation and obtain advice if your circumstances are complex.

Separate cash paid from relief claimed

You pay the subscription amount when investing. A potential tax relief is not an immediate discount at checkout. The timing, documentation and availability of a claim are separate questions from the company receiving your capital. Keep your cash-flow assumptions separate from the investment illustration.

Use illustrations as questions, not forecasts

A calculator helps explain how a particular set of assumptions fits together. It cannot establish eligibility, estimate commercial success or tell you what a future disposal will produce. Fees, personal circumstances and changes to the business can affect the outcome. The chart below illustrates a total-loss case; it does not predict an outcome.

ILLUSTRATIVE ONLY

Put the relief in perspective.

Explore a simple income tax and total-loss illustration.

Assumes full eligibility, sufficient tax liability, relief retained and a total loss qualifying for income loss relief. Excludes fees, timing and other reliefs. Figures above scheme limits are capped for this illustration. Not tax advice or a guarantee. Read HMRC guidance ↗︎

Go to the official source.

Use HMRC’s guidance for current eligibility requirements, reliefs and claim procedures.

Read the HMRC guidance ↗︎
TAKE IT FURTHER

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