HMRC's published guidance on the Seed Enterprise Investment Scheme and Enterprise Investment Scheme — income tax relief rates, CGT exemptions, new April 2026 company limits, carry-back, loss relief and the advance assurance process.
All figures sourced from HMRC's published guidance on GOV.UK. Rates apply to UK resident individuals investing in qualifying companies.
The Seed Enterprise Investment Scheme (SEIS) is designed for very early-stage UK companies. Per HMRC's published SEIS guidance on GOV.UK, investors can claim 50% income tax relief on up to £200,000 invested in qualifying SEIS shares per tax year, subject to having sufficient income tax liability. A company can raise a maximum of £250,000 in total under SEIS.
HMRC's Venture Capital Schemes Manual on GOV.UK contains the full technical guidance for SEIS: VCM30000 (SEIS investor guidance) and VCM32000 (qualifying company conditions). Advance assurance is handled under HMRC's risk finance services — see the GOV.UK advance assurance process.
| Relief | How it works | Condition |
|---|---|---|
| Income tax relief | 50% of amount invested, set against income tax bill | Up to £200,000/yr; sufficient tax liability needed |
| CGT exemption on disposal | 100% exempt — no CGT on gain from SEIS shares | 3-year minimum holding period |
| CGT reinvestment relief | 50% of reinvested gain is exempt from CGT | Reinvest qualifying gain into SEIS shares |
| Loss relief | Net loss (cost minus IT relief received) set against income or CGT | Company fails; shares become of negligible value |
| IHT Business Relief | 100% on first £2.5m per individual (from 6 Apr 2026) | 2-year minimum holding period; qualifying trade |
| Carry-back | Relief treated as if investment made in prior tax year | Within the investor limit for that year |
Source: GOV.UK — SEIS guidance
Illustrative only. Relief requires sufficient income tax liability and shares must be held for the minimum period. Figures based on HMRC's published rates.
| Tax year | Investor annual limit | Relief rate | Company max raise |
|---|---|---|---|
| 2022/23 | £100,000 | 50% | £150,000 |
| 2023/24 onwards | £200,000 | 50% | £250,000 |
| 2024/25 | £200,000 | 50% | £250,000 |
| 2025/26 | £200,000 | 50% | £250,000 |
| 2026/27 | £200,000 | 50% | £250,000 |
Per HMRC's guidance, once a company has received investment under EIS or VCT, it can no longer use SEIS. The sequencing is fixed: SEIS must be raised before EIS or VCT. This cannot be corrected after the fact. Verify sequencing before issuing shares. See HMRC's VCM Manual.
The Enterprise Investment Scheme (EIS) targets slightly more developed UK companies than SEIS. Per HMRC's published EIS guidance on GOV.UK, investors claim 30% income tax relief on up to £1 million invested in qualifying EIS shares per tax year. Where at least £1 million of the investment is in qualifying Knowledge Intensive Companies (KICs), the annual limit increases to £2 million. A 3-year minimum holding period applies.
HMRC's full EIS investor guidance is at VCM10000 on GOV.UK. Company qualifying conditions are at VCM12000. Investors claim relief using the EIS3 certificate issued by HMRC after the company submits a compliance statement. Carry-back elections are made on Self Assessment using the SA300 box.
| Relief | How it works | Condition |
|---|---|---|
| Income tax relief | 30% of amount invested, set against income tax bill | Up to £1m/yr (£2m KIC); sufficient tax liability |
| CGT exemption on disposal | 100% exempt on gain from EIS shares | 3-year minimum holding period; income tax relief retained |
| CGT deferral relief | Capital gain deferred while EIS shares held | Invest within 1 year before / 3 years after the disposal |
| Loss relief | Net loss set against income or CGT | Company fails; relief not previously withdrawn |
| IHT Business Relief | 100% on first £2.5m per individual (from 6 Apr 2026) | 2-year minimum holding; qualifying trade required |
| Carry-back | Relief treated as if investment made in prior tax year | Within the investor limit for that prior year |
Source: GOV.UK — EIS investor guidance
Illustrative only. Actual reliefs depend on individual circumstances, tax liability and company qualifying conditions. Deferred CGT becomes chargeable when the EIS shares are disposed of.
Per HMRC's VCM22000, EIS CGT deferral relief operates as follows. A capital gain arising on any asset can be deferred by reinvesting the gain into qualifying EIS shares within the permitted window: from 12 months before to 36 months after the disposal giving rise to the gain. The deferred gain is held over and becomes chargeable when the EIS shares are disposed of (or in certain other trigger events). Unlike the income tax relief, deferral relief is not subject to the £1m annual investor cap — there is no ceiling on the amount of gain that can be deferred.
Per HMRC's guidance, there is no annual limit on the amount of gain that can be deferred using EIS deferral relief. An investor with a £5m gain could in principle defer the entire amount by investing £5m into qualifying EIS shares within the permitted window, even if this exceeds the £1m (or £2m KIC) income tax relief limit. The income tax relief and the deferral relief are claimed separately. See HMRC VCM22000.
Per HMRC's published policy paper on GOV.UK (November 2025), the Finance Act 2026 significantly increased the amounts companies can raise under EIS and the gross assets test — allowing more mature, scaling businesses to qualify. The investor annual limits are unchanged.
Per HMRC's VCM12031, the new limits apply where shares are issued on or after 6 April 2026. Shares issued before that date remain subject to the previous limits. The same increased limits apply to VCT company investments.
| Limit | Before 6 Apr 2026 | From 6 Apr 2026 | KIC (from 6 Apr 2026) |
|---|---|---|---|
| Annual company investment limit | £5m | £10m | £20m |
| Lifetime company investment limit | £12m | £24m | £40m |
| Gross assets test (before share issue) | £15m | £30m | £30m |
| Gross assets test (after share issue) | £16m | £35m | £35m |
| Investor annual limit | £1m (£2m KIC) | £1m (£2m KIC) — unchanged | |
Source: GOV.UK — EIS and VCT Changes Policy Paper (Nov 2025) & HMRC VCM12031
Per HMRC's published guidance, the Investors' Relief lifetime limit on qualifying gains is £1 million for disposals made on or after 30 October 2024. HMRC has published anti-forestalling rules covering transactions entered into before that date where the disposal was structured in anticipation of the Budget change. Individuals with disposals straddling the Autumn 2024 Budget date should refer to HMRC's CGT rates guidance and seek qualified professional guidance on their specific facts.
Both SEIS and EIS provide significant CGT advantages beyond the income tax relief. Per HMRC's published guidance, there are three distinct CGT reliefs to understand: the exemption on the SEIS/EIS shares themselves, SEIS reinvestment relief on gains from other assets, and EIS deferral relief on gains from other assets. Each has separate qualifying conditions and time limits.
Per HMRC's guidance, where SEIS or EIS shares are held for the minimum 3-year period and income tax relief has been obtained and not withdrawn, any gain on disposal of those shares is exempt from CGT. This applies to the full gain — not just a proportion. The CGT exemption is conditional on the income tax relief being retained: if relief is withdrawn (for example because the company ceases to qualify), the CGT exemption also falls away.
Per HMRC's VCM36000, where an investor reinvests a capital gain from any other asset into qualifying SEIS shares in the same tax year (or by carry-back to the preceding year), 50% of the amount reinvested is exempt from CGT. The maximum reinvestment relief per tax year is therefore 50% × £200,000 = £100,000 of gain exempted. This is in addition to the income tax relief on the same investment.
Per HMRC's advance assurance guidance, before issuing shares a company typically applies to HMRC for advance assurance that it is likely to meet the SEIS or EIS qualifying conditions. Advance assurance is not a guarantee but provides comfort to investors. It is not mandatory, but investors should ask to see it before investing.
After the shares are issued, the company files an SEIS1 or EIS1 compliance statement with HMRC. HMRC reviews the statement and, if satisfied, authorises the issue of investor certificates — the SEIS3 (for SEIS) or EIS3 (for EIS). Without these certificates the investor cannot claim relief.
Per HMRC's guidance, investors must retain their SEIS3 or EIS3 certificate. HMRC may request evidence during an enquiry. The certificate states the amount eligible for relief and the date of share issue.
Per HMRC's claim guidance on GOV.UK, relief is entered in the 'Reliefs' section of the SA100 self-assessment return. HMRC has up to 5 years after the 31 January following the year of investment to enquire into the claim. Carry-back elections are made via SA300 or equivalent SA supplementary pages. CGT reliefs are reported on SA108.
Per HMRC's guidance, the minimum 3-year holding period begins on the later of the date of share issue or the date the company begins its qualifying trade. If the shares are sold within 3 years, all income tax relief is clawed back and must be repaid to HMRC. The CGT exemption also falls away. HMRC monitors compliance through information provided by the company.
Per HMRC's published guidance, EIS and SEIS income tax relief must be claimed within 5 years after the 31 January following the end of the tax year of investment. For a 2025/26 investment, the deadline is 31 January 2032. CGT deferral relief claims follow Self Assessment amendment rules. Carry-back elections must be made within the same 5-year window for the earlier year. Do not delay — missed deadlines mean lost relief.
Shares in qualifying SEIS and EIS companies may attract Business Relief (formerly Business Property Relief, BPR) for Inheritance Tax purposes. Per HMRC's published guidance, Business Relief applies where the company meets the qualifying conditions (primarily carrying on a qualifying trade) and the shares have been held for at least 2 years.
From 6 April 2026, Business Relief and Agricultural Property Relief are subject to a combined cap of £2.5 million per individual. The first £2.5m of qualifying assets receives 100% relief; the excess receives 50% relief (an effective 20% IHT rate). The cap is transferable between spouses and civil partners — married couples can pass on up to £5m free of IHT. This was confirmed by the Treasury on 23 December 2025 (raised from the original £1m announced at Autumn Budget 2024). VCT shares do not qualify for Business Relief.
Per HMRC's published guidance, Business Relief operated on different terms across the years covered by this guide. For tax years 2022/23, 2023/24, 2024/25 and 2025/26 (i.e. before 6 April 2026): 100% Business Relief was available on qualifying business assets with no monetary cap whatsoever — unlimited relief applied where the qualifying conditions were met. From 6 April 2026 (the 2026/27 tax year onwards): the first £2.5 million of combined Business Relief and Agricultural Property Relief qualifying assets per individual receives 100% relief; amounts above the cap receive 50% relief, producing an effective IHT rate of 20%. The cap is transferable between spouses and civil partners on death, allowing up to £5 million per couple. Individuals reviewing pre-April 2026 tax years should apply the uncapped rules for those years. See GOV.UK: Business Relief for Inheritance Tax.
HMRC's official guidance on Business Relief for IHT is at GOV.UK: Business Relief for Inheritance Tax. HMRC's IHT manual (IHTM) contains the full technical treatment. Note that Business Relief is not guaranteed — HMRC may challenge whether the company meets the qualifying conditions (particularly the 'mainly trading' test) at the time of death or transfer.
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This page summarises HMRC's published guidance. SEIS and EIS are high-risk investments with complex tax rules. For advice tailored to your circumstances, our free matching service connects you with verified UK tax specialists in venture capital, CGT and IHT planning.
Answers sourced from HMRC's published guidance with direct GOV.UK links. Not personal tax or financial advice.
This page summarises HMRC's published rules. SEIS and EIS are high-risk investments. Our free service connects you with verified UK tax specialists.
Important — information only, not tax or financial advice. UK Tax Hero summarises HMRC's published guidance as a free information and expert-matching service. Nothing on this page constitutes personal tax advice, financial advice or legal advice. SEIS and EIS are high-risk investments — the value of shares can fall to zero. Figures shown are based on HMRC's published guidance for 2022/23 to 2026/27 and may be subject to change. Always verify on GOV.UK and consult a qualified professional before investing. References to VCM manual sections are provided for information only. UK Tax Hero is not regulated by HMRC, the FCA or any professional body.
