Seed enterprise investment scheme ― tax relief

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

The seed enterprise investment scheme (SEIS) is designed to encourage individuals to invest in new shares issued by qualifying unquoted companies. SEIS is specifically aimed at very small companies which have only started to carry on a qualifying trade. The scheme complements the enterprise investment scheme (EIS) as it is expected that companies may want to go on to use EIS after an initial investment under SEIS.

HMRC has issued a helpsheet HS393 and guidance at VCM30000 onwards.

See the SEIS and EIS ― overview guidance note for a comparison of the tax reliefs available under SEIS and EIS.

SEIS tax benefits

A subscription for eligible shares of a qualifying SEIS company is a tax efficient investment for the individual who can benefit from the following tax reliefs:

•
income tax relief for the investor of up to 50% of the amount invested, subject to an annual subscription limit of £200,000 (£100,000 for shares issued before 6 April 2023)
•
gains on disposals of SEIS shares after three years may be exempt from capital

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