SEIS Tax Reliefs at a Glance
All four SEIS reliefs on one page: the 50%, the two capital gains reliefs and loss relief, with what each is worth and the strings attached.
In this article
There are four separate SEIS tax reliefs, and most explanations bury three of them under the famous 50%. This page gives each one its due in plain terms: what it is, what it is worth on real numbers, and the string attached. Think of it as the menu; the full reliefs guide is the cookbook.
The four SEIS tax reliefs on one table
| Relief | What you get | The string |
|---|---|---|
| Income tax relief | 50% of your investment off your income tax bill | Hold 3 years; you need the tax to relieve |
| Reinvestment relief | 50% of a reinvested capital gain exempt from CGT | Gain and subscription in the same tax year |
| Disposal relief | No CGT on the SEIS shares when you sell | 3 years held, income tax relief kept |
| Loss relief | Loss (net of relief) set against income or gains | Genuine loss; relief not withdrawn |
Relief one: the 50%
Subscribe £10,000 for qualifying shares and £5,000 comes off your income tax bill, in the year of investment or carried back to the year before. The ceiling is £200,000 invested per tax year, and the relief cannot exceed the tax you owe. This is the engine of the scheme, and it is covered in worked detail in the 50% explained.
Relief two: reinvestment relief
Sold something else at a profit? Reinvest the gain into SEIS shares in the same tax year and half of that gain escapes Capital Gains Tax permanently. On a £50,000 residential property gain taxed at 24%, sheltering half saves £6,000, stacked on top of the 50% income tax relief on the subscription itself. The pairing rules live in the CGT reliefs guide.
Relief three: disposal relief
Hold the shares three years, keep your income tax relief intact, and any gain when you sell is entirely CGT-free, with no upper cap. This is the quiet compounding reward: the rare SEIS winner pays nothing on the way out.
Relief four: loss relief
If the company fails, your allowable loss, what you paid minus the income tax relief you kept, can be set against income at your marginal rate rather than languishing as a capital loss. For a 45% taxpayer, a total wipe-out on £10,000 ends up costing about £2,750. The full arithmetic, including negligible value claims, is in the loss relief guide.
How they stack in one story
Invest £20,000: £10,000 back via the 50%. Fund it from a £20,000 gain elsewhere: another £10,000 of that gain exempted. Company thrives and you exit at £60,000 after year three: £40,000 gain, no CGT. Company dies instead: loss relief hands a 45% taxpayer roughly £4,500 more back. Four reliefs, one coherent design: soften the entry, exempt the win, cushion the loss.
The strings, collected
- Three years of holding, unconnected, with no value taken out.
- A qualifying company that stays qualifying; its behaviour can cost you relief.
- Paperwork: no claim without the SEIS3, as explained in how to claim.
- Your own tax position sets the ceiling on what any relief is worth.
What each relief needs from you
| Relief | Your action | Evidence |
|---|---|---|
| 50% income tax | Claim via Self Assessment or PAYE | SEIS3 certificate |
| Reinvestment | Claim alongside, matching the gain | SEIS3 plus your gain computation |
| Disposal | No claim; return the sale as exempt | Three-year evidence and relief history |
| Loss relief | Claim on disposal or negligible value | SEIS3, loss arithmetic, failure evidence |
The two persistent misreadings
First, SEIS reinvestment relief is an exemption, not the deferral its EIS cousin offers; the sheltered half never returns to charge, a distinction the comparison in SEIS vs EIS vs VCT exists to hammer home. Second, the 50% is a reduction of tax due, not a refundable credit: HMRC will never pay you more than you owed. Both misreadings flatter the scheme beyond its design, and both unwind at claim time, which is the wrong moment for surprises.
Which relief matters most, by reader
A higher earner with a fat income tax bill feels the 50% most; it is immediate and large. A seller of property or a business, sitting on a fresh gain, often values reinvestment relief just as highly, since it stacks with the 50% in the same year. The long-game optimist prizes disposal relief, the uncapped exemption that makes the rare winner tax-free. And the realist sizes every decision against loss relief, because at this stage of investing the cushion is not a footnote, it is the plan for the likely case.
Common questions
What tax reliefs does SEIS give?
Four: 50% income tax relief on up to £200,000 a year, exemption of half a reinvested capital gain, CGT-free disposal of the shares after three years, and loss relief against income or gains if the company fails.
Can I use all the SEIS reliefs together?
Yes, they are designed to combine: the 50% and reinvestment relief at entry, disposal relief or loss relief at the end.
Which SEIS relief is most valuable?
Usually the 50% income tax relief by size, though for a successful exit the uncapped CGT exemption can dwarf it.
Do the four SEIS tax reliefs stack?
Yes, and that is the point of the design. The SEIS tax reliefs interlock rather than compete: 50% off your bill on the way in, exemption on the way out, loss relief underneath if it fails, and reinvestment relief if you arrived with a gain. The SEIS tax reliefs only survive together if the three-year conditions hold, so the strings section above matters as much as the headline percentages.
Which of the SEIS tax reliefs is most overlooked?
Reinvestment relief. People anchor on the 50% and miss that the SEIS tax reliefs include a way to make half of an existing capital gain exempt for good, not merely deferred. On a large gain that quietly rivals the headline relief for value.
