Seed enterprise investment scheme ― calculating clawback of relief

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Seed enterprise investment scheme ― calculating clawback of relief

Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
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The seed enterprise investment scheme (SEIS), like the enterprise investment scheme (EIS), is designed to encourage individuals to invest money in shares issued by small qualifying unquoted companies.

HMRC has published some basic guidance on how SEIS works, and further details at VCM30100 onwards. See the Seed enterprise investment scheme (SEIS) ― introduction guidance note for an overview of the scheme.

Withdrawal of seed enterprise investment scheme relief

For guidance on situations where relief is withdrawn or reduced, see the Seed enterprise investment scheme ― withdrawal of relief guidance note.

There are anti-avoidance provisions to prevent an investor from obtaining income tax relief on their SEIS subscription and then selling the shares shortly afterwards. If the investor disposes of their shares within three years of issue, there will be a clawback of the income tax relief originally given. There are also clauses that treat the granting of call or put options over the shares as a disposal.

The relief that is clawed back is limited to the relief originally claimed.

The

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