SEIS and EIS can reduce the after-tax cost of qualifying startup investments. The relief depends on the investor, company, share issue and continuing conditions. It is a claim against tax, not money automatically returned when you subscribe.
This guide covers the 2026/27 tax year, from 6 April 2026 to 5 April 2027, using rules checked on 8 September 2026. Start by assessing the investment on its commercial merits, then work through the relief that your circumstances may support.
The headline investor limits
| Scheme | Income Tax relief rate | Annual qualifying investment limit |
|---|---|---|
| Seed Enterprise Investment Scheme | 50% | £200,000 |
| Enterprise Investment Scheme | 30% | Normally £1m; up to £2m where the excess over £1m qualifies through knowledge-intensive companies |
Relief is limited by your UK Income Tax liability. You can elect to treat some or all of an eligible subscription as made in the preceding tax year, subject to that year's limits and available liability. Unused Income Tax relief cannot simply be carried forward. HMRC investor overview.
For example, £10,000 of qualifying SEIS shares may generate £5,000 of Income Tax relief. If the relevant year's liability supports only £3,000, do not assume the remaining £2,000 becomes a cash payment. Consider whether a valid carry-back election changes the position.
Check eligibility before subscribing
Ask which scheme and share issue the company expects to qualify, and examine the share terms and intended use of the money. Investor connections, employment or director arrangements, existing holdings and arrangements that protect against ordinary investment risk can affect eligibility. EIS director exceptions require particular care. HMRC EIS eligibility and claims guidance.
Company fundraising limits are separate from your personal limit. For investments from 6 April 2026, the increased EIS/VCT limits for most companies are:
| Company category | Relevant investment in any 12-month period | Lifetime relevant investment |
|---|---|---|
| Not knowledge-intensive | £10m | £24m |
| Knowledge-intensive | £20m | £40m |
The gross-asset limits for most companies are £30m immediately before and £35m immediately after the share issue. Specified companies remain subject to the previous limits, so check the exception before applying the larger figures. These are company-level limits across relevant investments, not extra personal allowances. HMRC's 2026 changes and exception references.
An advance-assurance letter is useful company-level evidence, but it is not your certificate or a guarantee of your personal entitlement. Keep the actual investment documents alongside any assurance supplied.
Check what an SPV or nominee actually holds for you
HMRC permits qualifying shares subscribed for and held through a nominee to be treated as the individual's shares for these rules. It distinguishes that arrangement from investing in a partnership that in turn owns shares: partnership ownership does not qualify under the nominee provision. HMRC EIS nominee rules, SEIS nominee rules.
The distinction is more useful than asking whether something is called an SPV. Establish whether identifiable shares are held on your behalf, how that ownership is recorded and who supplies the certificate. Nominee treatment does not remove the company, share or individual eligibility conditions. Nor does calling a structure tax-transparent establish entitlement to either relief.
Wait for the certificate, then make the claim
For a direct EIS investment, retain the EIS3 certificate; EIS5 is relevant to certain approved-fund investments. HMRC says an investor who has not received the relevant form must wait before claiming. If the form arrives after a return has been filed, there is a claim process using the certificate. HMRC EIS claim procedure.
For SEIS, the company provides SEIS3. Your records should identify the company, share-issue date, subscription amount and unique investment reference. Use the filing instructions applicable to the year and claim being made. HMRC SEIS claim guidance.
Record which subscriptions and amounts you allocate to each tax year. That prevents the same investment being counted twice and makes it easier to reconcile a later carry-back claim. The minimum holding period does not mean you must wait three years to claim initial Income Tax relief.
Monitor the conditions after investing
For SEIS, relevant continuing conditions generally run for three years from share issue. Disposals, receiving value or changes in investor or company eligibility can reduce or withdraw relief. The detail depends on the event. HMRC SEIS withdrawal overview.
For EIS, the relevant three-year endpoint can run from the later of share issue and commencement of the qualifying trade. Do not use the subscription payment date as a universal starting point. HMRC EIS qualifying periods.
Before selling, accepting a restructuring or changing your role at the company, check the effect on existing relief. Keep correspondence about material changes with the original certificate.
Keep the capital-gains reliefs separate
There are three different questions: tax on gains from the qualifying shares, deferral of a gain made elsewhere and exemption of part of a reinvested gain.
| Relief | What it addresses | Key distinction |
|---|---|---|
| SEIS/EIS disposal relief | Gains on qualifying scheme shares | Depends on Income Tax relief and the applicable holding and other conditions |
| EIS deferral relief | A gain from disposing of another asset | Defers the gain; it can become chargeable again on a later event |
| SEIS reinvestment relief | A gain reinvested in qualifying SEIS shares | Can exempt 50% of the qualifying reinvested amount, subject to the scheme's conditions and limits |
For EIS deferral, the qualifying share issue normally falls within one year before or three years after the original disposal. Deferral can be available without EIS Income Tax relief; that differs from the requirements for disposal relief. A gain exempt on the EIS shares does not extinguish a separate deferred gain revived when they are sold. HMRC EIS capital-gains guidance.
SEIS reinvestment relief requires Income Tax relief on the same investment and appropriate tax-year matching. Under the £200,000 annual qualifying investment limit, up to £100,000 of gain can qualify for exemption. That is an amount of gain exempted, not a £100,000 tax refund. HMRC's capital-gains comparison and SEIS rules.
Calculate loss relief on the remaining exposure
Qualifying share losses may be set against income, subject to the rules. The loss calculation takes account of subscription Income Tax relief retained. A worthless holding may require a valid negligible-value claim or another qualifying disposal; a lower internal valuation alone is not the claim. HMRC share-loss guidance.
HMRC also confirms that a SEIS loss is reduced by the Income Tax relief still attributable to the shares. HMRC SEIS loss calculation.
Illustratively, assume a £10,000 investment becomes worthless, initial relief is retained and all remaining qualifying loss obtains relief at 45%:
| Calculation | SEIS | EIS |
|---|---|---|
| Initial Income Tax relief | £5,000 | £3,000 |
| Remaining qualifying loss | £5,000 | £7,000 |
| Further tax saving at 45% | £2,250 | £3,150 |
| Net loss after both reliefs | £2,750 | £3,850 |
These are conditional examples, before fees and the time value of money. Actual relief depends on eligibility, usable income and the claim. Record each relief separately and check its interaction with the others; adding headline percentages together cannot establish that an investment is risk-free.
FAQ
Can a company raise under SEIS and then under EIS?
Yes, subject to each scheme's conditions and funding limits. Sequence matters: HMRC says the company and relevant subsidiaries must not have received EIS or VCT investment on or before the SEIS share-issue day. A combined financing therefore needs properly sequenced issues. HMRC's ordering rule.
When can I claim SEIS or EIS relief?
Wait until you have the applicable compliance certificate, then follow the claim procedure for the relevant year. You do not have to wait until the minimum holding period ends to claim initial Income Tax relief. Advance assurance and a payment receipt are not substitutes for the certificate.
Does relief still apply if I invest through an SPV?
It can apply to qualifying shares subscribed for and held on your behalf through a nominee. An interest in a partnership that itself invests in shares is different and does not qualify under that nominee rule. Establish your actual beneficial ownership and investor eligibility; the SPV label is insufficient.
What happens if the company stops qualifying?
Relief may be reduced or withdrawn, depending on the event and applicable provisions. A sale, restructuring or change in activities needs checking during the relevant period. Commercial failure does not automatically settle the tax treatment either: special provisions and loss-relief conditions may apply.
Is EIS Capital Gains Tax deferral the same as an exemption?
No. Deferral postpones a gain's taxation until a chargeable event, which can include selling the EIS shares. An exemption on a qualifying gain from the EIS shares themselves is separate. Keep the original deferred gain and the later share investment in distinct tax records.
