HMRC internal manual

Venture Capital Schemes Manual

VCM33070 - SEIS: income tax relief: general requirements: no tax avoidance requirement

ITA07/S257CE

Commerciality and tax avoidance

The shares must not be issued other than for bona fide commercial purposes, and must not be issued as part of a scheme or arrangement whose main purpose, or one of whose main purposes, is the avoidance of tax. The reduction of an investor’s tax liability which flows from the schemes in the circumstances intended by Parliament is obviously not a tax advantage at which this rule is aimed.

Before any case is challenged solely on these grounds a report should be made to CT Innovation & Growth Team (CTI&G).