SEIS—conditions for relief: individual investor conditions

The following Tax practice note provides comprehensive and up to date legal information covering:

  • SEIS—conditions for relief: individual investor conditions
  • Conditions relating to the individual investor
  • Subscribe for shares on own behalf—nominees
  • SEIS funds
  • No employee investors
  • No substantial interest in the issuing company
  • No related investment arrangements
  • Linked loans
  • Tax avoidance test
  • No pre-arranged exit
  • More...

SEIS—conditions for relief: individual investor conditions

IP COMPLETION DAY: The Brexit transition period ended at 11pm on 31 December 2020. At this time (referred to in UK law as ‘IP completion day’), transitional arrangements ended and significant changes began to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: What does IP completion day mean for Tax?

The seed enterprise investment scheme (SEIS), like the enterprise investment scheme (EIS), is designed to encourage investment in smaller, higher-risk trading companies by offering a range of tax reliefs to individual investors purchasing newly issued shares in those companies.

To be eligible for relief, the scheme imposes numerous requirements that must be met, including in relation to:

  1. the individual investors

  2. the issued shares, the funds raised and arrangements in general, and

  3. the issuing company

This Practice Note focuses on the conditions applicable to the individual investor. These conditions are described in the context of the income tax relief provided for in Part 5A of the Income Tax Act 2007 (ITA 2007).

Relief from capital gains tax (CGT) (under the disposal exemption or re-investment relief) is only available in respect of shares to which SEIS income tax relief is attributable, hence these conditions apply equally for the purposes of CGT relief.

For details of the other conditions see Practice Notes:

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