Seed Enterprise Investment Scheme (SEIS): SEIS disposal relief: income tax relief reduced: example 1
In this example TCGA92/S150E(2) applies but TCGA92/S150E(5) does not.
- December 2012 investor subscribes £100,000 for 100,000 shares in a SEIS company. Maximum Income Tax relief of £50,000 is given in the tax year 2012-13 applying the SEIS rate 50%.
- January 2014 the investor receives £20,000 value from the company. The Income Tax relief is reduced by £10,000 by making an assessment.
- January 2018 all the shares are sold for £270,000.
The chargeable gain before any exemption under section 150E(2) is calculated:
The exemption applies only to the gain remaining after deducting the following amount:
|Chargeable gain||x||Reduction in relief|
|Relief attributable to shares before the reduction|
£136,000 of the gain is exempt and £34,000 remains chargeable.