SEIS Tax Relief Explained (2026)

The tax reliefs available through the Seed Enterprise Investment Scheme are among the most generous in the UK tax code. They exist because the government wants to incentivise private capital to flow into very early-stage companies — businesses that are too small and too risky for institutional investors, but which, if they succeed, create jobs, innovation and economic growth.

This article explains each SEIS tax relief in plain English, with worked examples so you can see exactly what the numbers look like in practice.

Relief 1: 50% income tax relief

The headline relief. Invest £10,000 in a qualifying SEIS company and you can reduce your income tax bill by £5,000 in the same tax year. The relief is claimed through Self Assessment and can also be carried back to the prior tax year if you prefer.

Example: You earn £90,000 in the 2025/26 tax year and have an income tax liability of £28,000. You invest £20,000 in two SEIS qualifying companies. Your income tax relief is £10,000. Your effective tax bill drops to £18,000. The £10,000 relief is paid either as a reduction in tax owed or as a refund if you have already paid via PAYE.

The relief is subject to a ceiling: you cannot claim more relief than your actual income tax liability in the relevant year. If your tax bill is lower than the relief available, you may wish to carry back to the prior year to use more of the relief.

Relief 2: CGT exemption on gains

Hold your SEIS shares for at least three years and any profit on disposal is completely free of capital gains tax. For an investor paying CGT at 24% (the higher rate for shares from April 2024), this is a meaningful saving on a successful investment.

Example: You invest £10,000 in a SEIS company. After five years, you sell the shares for £40,000 — a gain of £30,000. Outside SEIS, you would pay £7,200 CGT (24% of £30,000). Inside SEIS, the gain is tax-free. You keep the full £40,000.

Relief 3: Loss relief

If the company fails, SEIS loss relief significantly reduces your effective loss. The calculation: subtract the income tax relief already received from the original investment, leaving the net amount at risk. You can then claim loss relief on that net amount against income tax or capital gains tax.

Example (45% additional-rate taxpayer): You invest £10,000. You receive £5,000 income tax relief. Net investment: £5,000. Company fails. Claim loss relief at 45% on £5,000 = £2,250. Total tax recovered: £7,250. Net loss: £2,750 — 27.5p in the pound.

Example (40% higher-rate taxpayer): Same investment. Loss relief at 40% = £2,000. Total recovered: £7,000. Net loss: £3,000 — 30p in the pound.

Relief 4: CGT reinvestment relief

If you have a capital gain from any other source — selling a buy-to-let property, selling shares, selling a business — you can reinvest that gain into SEIS and reduce the CGT due on the original gain by 50%. This is in addition to the 50% income tax relief.

Example: You sell an investment property and make a gain of £60,000. Normal CGT at 24% would be £14,400. Instead, you reinvest £60,000 into SEIS. The CGT is reduced by 50% — to £7,200. You also receive income tax relief of £30,000 (50% of £60,000). In total, the SEIS investment reduces your tax bills by £37,200 in the year of investment.

Relief 5: Inheritance tax relief

SEIS shares held for at least two years qualify for Business Relief under the inheritance tax rules, which means they are excluded from your estate for IHT purposes. With IHT at 40%, a £200,000 SEIS portfolio could save £80,000 in inheritance tax. This makes SEIS relevant for estate planning as well as income tax and CGT management.

How to claim SEIS relief

After your investment qualifies, the company issues a SEIS3 form (or your investment platform provides equivalent documentation). You use this to claim relief on your Self Assessment tax return. If you pay tax via PAYE and do not normally file a return, you can contact HMRC directly to claim. The process is straightforward and HMRC publishes clear guidance.