SEIS for Investors | Claim Up to 50% of Your Investment Against UK Income Tax
FundMyPitch
Connecting Angel & Institutional Investors with Early Stage Investment opportunities
Considering investing in a high-risk startup? The UK government’s Seed Enterprise Investment Scheme (SEIS) offers substantial tax reliefs to encourage such investments.
Key Benefits of SEIS
When you invest in an SEIS-eligible startup, you can claim up to 50% of the amount invested as a deduction from your Income Tax for this tax year or the previous one. Additionally, you won't pay Capital Gains Tax (CGT) on profits if you hold your shares for at least three years.
Understanding SEIS Benefits
Income Tax Relief
Capital Gains Tax Relief
Loss Relief
Inheritance Tax Relief
You can also carry back the tax relief to the previous tax year, provided you haven't reached the SEIS investment limit of ￡250,000 for that year.
SEIS Rules for Investors
To qualify for SEIS tax relief, both you and the company must meet certain criteria:
Company Eligibility
The company must be UK-based, have fewer than 25 employees, and less than ￡350,000 in gross assets. It’s advisable to ensure the company has Advance Assurance to confirm eligibility.
Income Tax Liability
You must have UK Income Tax liability. You don't need to be a UK resident, but your income must be subject to UK Income Tax.
Employment Restrictions
You cannot be an employee of the company, though being a paid director is allowed.
No Substantial Interest
You must not hold a substantial interest (over 30% shareholding) in the company.
No Related Investment Arrangements
Investments made as part of reciprocal arrangements with other investors are not eligible for SEIS relief.
No Linked Loans
There should be no loans linked to the company for you or your associates.
Investment Limit
You can invest up to ￡200,000 per year from April 2023, enjoying a 50% tax break and CGT exemption on profits after three years.
Minimum Holding Period
Shares must be held for at least three years to retain full SEIS benefits.
Upfront Payment
Shares must be fully paid for upfront and must be ordinary shares.
No Receipt of Value
You must not receive any value from the company for three years, which includes share repurchases, debt repayments, or benefits.
No Put or Call Options
SEIS relief can be withdrawn if there is a put or call option on the shares before the three-year anniversary of issuance.
Further Assistance
For more detailed guidance on Tax Relief for Investors - be sure to checkout the HMRC guidance here with additional resource available via this help sheet.
Want to consider SEIS Investment Opportunities?
Fundmypitch is a platform that bridges the gap between angel investors and businesses seeking investment. We provide a transparent and ultra-secure environment for investors and entrepreneurs to interact and connect.
We have supported 986 companies across 22 sectors raise funds, the majority of them already having S/EIS advance assurance in place.
If you would like to consider SEIS investment opportunities you can register here, after the initial onboarding you can curate deal flow tailored to your preferences.
Important Notice: The content of this article has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this article for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested.
The tax relief referred to on this website depends on the individual circumstances of each investor and may be subject to change in the future. In addition, the availability of any tax reliefs depends on investee companies maintaining their qualifying status.