Seed Enterprise Investment Scheme (SEIS)
The highest income tax relief available in the UK at 50%. SEIS targets very early-stage companies with up to £200,000 per year investment, plus CGT reinvestment relief.
By Omair SaoLast reviewed — rates for the 2026/27 tax year. See how we check our figures.
How It Works
You invest in qualifying early-stage companies (under 3 years old, fewer than 25 employees). You get 50% income tax relief — a £10,000 investment costs £5,000. Gains are CGT-free after 3 years. You can also exempt 50% of other capital gains reinvested into SEIS.
Tax Treatment
50% income tax relief — the highest rate available. Gains CGT-free after 3 years. 50% of capital gains reinvested in SEIS are exempt from CGT. Loss relief available.
Tax Advantages
- 50% income tax relief — the highest available in the UK
- Capital gains CGT-free after 3 years
- 50% CGT reinvestment relief on gains invested in SEIS
- Loss relief if the company fails
Who Is This Suitable For?
Very high earners and sophisticated investors who understand early-stage company risk. The 50% relief means you invest at half price.
Worked Example: £20,000 into an SEIS company alongside a £20,000 gain
- 1In the same tax year you sell shares in a GIA realising a £20,000 gain, and invest £20,000 in an SEIS-qualifying company.
- 2Income tax relief at 50% is £10,000, limited to the income tax you paid that year, so your net cost is £10,000 before counting the CGT saved.
- 3Reinvestment relief exempts half the gain matched by the investment: £10,000 of the £20,000 gain disappears; the other £10,000 is taxed as usual after your £3,000 annual exempt amount.
- 4If the company fails completely, the allowable loss is £20,000 − £10,000 relief = £10,000, claimable against income or gains.
Result: The reliefs mean a total loss costs well under half the amount invested, while success after three years is entirely free of CGT.
Illustrative figures using the 2026/27 rules on this page, last checked on 25 September 2026.
Advantages and Drawbacks
Advantages
- 50% income tax relief is the highest rate available on any UK investment.
- Reinvestment relief can exempt up to £100,000 of gains a year, matching the £200,000 investment limit.
- Companies can seek HMRC advance assurance before raising money, reducing the risk of relief later being refused.
Drawbacks
- SEIS companies are at the earliest, riskiest stage — typically under three years old with fewer than 25 employees — so total loss is a real possibility.
- The company must keep qualifying for three years; if it is sold or changes activity, relief can be withdrawn.
- Shares are illiquid, and a follow-on funding round may dilute your stake heavily.
Notes for Limited Company Owners
Your own company can raise SEIS money from outside investors if it qualifies, and founders often underestimate how attractive the 50% relief makes their share offer. As an investor you are barred from relief where you are an employee (directors can sometimes qualify) or hold over 30%, so SEIS is a way to back other founders, not yourself.
Common Mistakes
- Assuming reinvestment relief works for a gain made in a different tax year from the share issue; the matching rules are strict.
- Investing more than £200,000 in a year and expecting relief on the excess.
- Not checking the company is still within the SEIS limits when your shares are issued.
Who Should Avoid It
Anyone who cannot afford to lose the entire investment, and people without significant income tax or gains to relieve, since the tax benefits are what justify the risk.
Official Sources
The rules on this page come from the following official pages and were checked on 25 September 2026. Read how we check our figures.
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Frequently Asked Questions
SEIS vs EIS?
SEIS is for earlier-stage companies and offers 50% relief (vs 30%). SEIS limit is £200k/year vs £1m for EIS. SEIS also offers CGT reinvestment relief.
Can I claim both in the same year?
Yes. You can invest £200,000 in SEIS and £1,000,000 in EIS in the same year. The reliefs are independent.
How risky is SEIS?
Very risky — early-stage startups have a high failure rate. The 50% relief means the company must fall over 50% before you lose money. Loss relief provides further protection.