How Seis Works

To understand how SEIS tax relief works in practice click on each of the scenarios

The company is loss making
  • An investment of £10,000 has been made
  • At 50% tax relief, £5,000 can be recovered
  • £5,000 is now considered a loss to the investor. This can be offset against their income tax at the percentage they pay in income tax. Additional rate tax payers are able to receive 45% back from the £5,000 loss against their income tax liability (£2,250)
  • The actual loss to an additional rate tax payer would therefore only be £2,750 from an initial £10,000 investment
The company maintains its value over three years
  • An investment of £10,000 has been made
  • At 50% tax relief, £5,000 can be recovered
  • If the investor sells the shares or the company exits, the investor would receive £10,000 back from their initial investment, suffering no loss
  • There is an overall effective gain of £5,000 which would have been off set the investor’s income tax bill
The company is successful and doubles in value over three years
  • An investment of £10,000 has been made
  • At 50% tax relief, £5,000 can be recovered
  • If the investor sells the shares or the company exits, the investor gains £10,000 in addition to initial investment and will have to pay no capital gains tax
  • The investor therefore makes 150% return on investment which is tax free

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