HMRC internal manual

Venture Capital Schemes Manual

SEIS: income tax relief: withdrawal or reduction of SEIS relief: acquisition of trade or trading assets

You should check the other guidance available on GOV.UK from HMRC as Brexit updates to those pages are being prioritised before manuals.


As the SEIS is intended to encourage genuinely new investment in companies by outsiders the legislation needs to ensure that relief is not available to anyone who directly or indirectly owned the trade before it came to be owned by the company. This is done by ITA07/S257FP.

Where the section applies any relief given to the individual is to be withdrawn. (Under ITA07/S257FP(4) this has the effect that where relief has not yet been given the individual is not eligible for it.)

To decide whether the provision might apply to an investor we have to consider whether, at any time within period A (see VCM31140), either the individual or any group of persons to which he or she belongs either:

  • has more than a half share interest in the trade or part of the trade as carried on by the company or its qualifying subsidiary, or
  • controls the company.

In the first case, the provision will apply if the individual or group also had such an interest in the trade, or a part of the trade, at some previous time in the same period when it was carried on by some person other than the company. In the second case, ITA07/S257FP will apply if the individual or group, at some previous time in the same period, controlled another company which was then carrying on the trade or part of the trade.