Eligibility and scheme conditions apply. Neither relief prevents a total capital loss.
Supporting the earliest stages
SEIS helps qualifying young UK businesses attract early investment. Investors subscribe for new shares and may qualify for tax relief. These businesses often have limited trading histories and face significant commercial uncertainty.
Income tax relief
Eligible investors may claim income tax relief at 50% on qualifying SEIS investment, subject to sufficient UK income tax liability and the relevant annual limit. Relief is conditional and may be withdrawn if requirements cease to be met.
Capital gains and losses
SEIS can provide relief on qualifying investment gains and a separate reinvestment relief for certain existing capital gains. Eligible investment losses may also qualify for relief. The rules differ from EIS CGT deferral.
The three-year rule
Key SEIS conditions must continue to be met during the relevant period. Holding shares for at least three years is a tax condition, not a promise that the company will succeed or that your shares can be sold.
What to check
Review the proposed share issue, company eligibility, use of funds and financial position. HMRC advance assurance addresses particular scheme conditions based on supplied information; it is not approval of the business or a guarantee of investor relief.
Understand a seed-stage plan
An early business may still be testing its market, product and delivery model. Look at what the next funding period is intended to achieve, which assumptions have already been tested and which remain uncertain. Forecast revenue is a plan, not evidence that customers will pay. Ask what the company needs to learn before it can grow.
Look at runway and future funding
Understand the expected time between the current funding and the next major milestone. A business may need additional capital, and there is no assurance that it will be available on acceptable terms. Consider the implications of slower sales, higher costs or delayed development. A funding target does not tell you how long the capital will last.
Go to the official source.
Use HMRC’s guidance for current eligibility requirements, reliefs and claim procedures.
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What is EIS?
Start here if the Enterprise Investment Scheme is new to you. Follow the journey from subscribing for shares to understanding why both business quality and tax conditions matter.
Inside this guide
- How a share investment works
- Company and investor conditions
- The documents to keep
EIS & SEIS tax benefits
Separate the subscription amount, potential relief and capital at risk. Explore worked illustrations and see how income tax and eligible loss relief interact in a total-loss case.
Inside this guide
- Income tax and capital gains treatment
- Worked calculator and visual breakdown
- Cash flow, claims and eligibility