Last updated: 14 October 2026
What is the Seed Enterprise Investment Scheme (SEIS)?
SEIS gives investors 50% income tax relief on up to £200,000 a year invested in new shares of qualifying early-stage companies, plus CGT exemption on gains when the shares are sold after 3 years. A company can raise up to £250,000 in total under SEIS, must be under 3 years old from its first trade, have gross assets of £350,000 or less and fewer than 25 employees. These limits were raised in April 2023 and remain in place for 2026/27.
SEIS at a glance
| Feature | Limit or relief |
| Income tax relief | 50% of amount invested |
| Annual investor limit | £200,000 |
| Company lifetime limit | £250,000 |
| Company age | Under 3 years from start of trade |
| Gross assets before investment | £350,000 or less |
| Employees | Fewer than 25 |
| Minimum holding period | 3 years |
| CGT on disposal | Exempt if held 3 years |
| CGT reinvestment relief | 50% of gain reinvested is exempt |
Investor conditions
- Not an employee of the company (directors can qualify)
- Hold no more than 30% of shares or votes, including associates
- Shares must be new, full-risk ordinary shares
- Pay in cash
Loss relief
If the company fails, the investor can claim loss relief on the amount invested less income tax relief received, against income or gains. With 45% loss relief, the effective risk on £10,000 invested can be as low as £2,750.
Example
Rhys invests £50,000 in a tech start-up under SEIS in 2026/27. He gets £25,000 off his income tax bill. He also sold shares in 2026/27 with a £40,000 gain and reinvested £40,000 of that into SEIS shares, so £20,000 of the gain is exempt. If the start-up succeeds and he sells after 4 years for £200,000, the whole gain is CGT-free.
Advance assurance
Companies can apply to HMRC for advance assurance before raising money. It isn’t compulsory but reassures investors. After shares are issued and the company has traded for 4 months or spent 70% of the money, it submits form SEIS1 to get compliance certificates (SEIS3) for investors.
SEIS and EIS together
A company that has raised SEIS money can later raise EIS funds, where investors get 30% income tax relief and the company limits are much higher. SEIS must be raised first.
Common mistakes
- Issuing shares before money is received
- Using preference shares with special rights
- Investors connected through employment
- Missing the 3-year holding requirement
Records to keep
Investors should keep SEIS3 certificates, share certificates and evidence of payment. Companies should keep board minutes, share registers and use of funds records.
What has changed since 2023
Before 6 April 2023, the company limit was £150,000, gross assets had to be under £200,000, the company had to be under 2 years old and investors could put in £100,000. The current higher limits make SEIS useful for more start-ups, and the scheme has been extended beyond its original 2025 sunset date.
Frequently asked questions
Can I carry back SEIS relief?
Yes, to the previous tax year.
Can I invest through a fund?
Yes, SEIS funds exist.
Does SEIS reduce inheritance tax?
Shares may qualify for Business Property Relief after 2 years.
Can a director get SEIS?
Yes, if not an employee.
Related: the Patent Box, lending to or buying shares in a friend’s company and the best business structure.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with SEIS and EIS advance assurance. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
