Seed Enterprise Investment Scheme (SEIS)

You need enough income tax liability in the year to absorb the relief. It reduces a tax bill; it is not paid out as cash.

• Income tax relief at 50% of the amount invested, on up to £200,000 in a tax year.
• Capital gains tax exemption on any growth, provided the shares are held for at least three years.
• Reinvestment relief, exempting 50% of a capital gain reinvested into SEIS shares in the same tax year.
• Loss relief on the net cost if the company fails, set against income or gains.

• Up to £250,000 raised under SEIS in total.
• Gross assets of no more than £350,000 when the shares are issued.
• Trading for less than three years.
• Fewer than 25 full-time equivalent employees.
• A qualifying trade, carried on in the UK through a permanent establishment.

Most companies ask HMRC for Advance Assurance before a raise. HMRC confirms that, on the information provided, the company looks likely to qualify.

It is useful comfort and we publish the letter itself rather than a claim that one exists. It is not a guarantee that relief will be available, and it says nothing at all about whether the investment is a good one.

• Selling the shares within three years of issue, or of the start of trade if later.
• The company ceasing to meet the qualifying conditions during the period.
• Becoming connected with the company, broadly by holding more than 30% or by being an employee.
• Receiving value from the company during the qualifying period.