Venture Capital Schemes Manual

VCM45010 - Seed Enterprise Investment Scheme (SEIS): re-investment relief: introduction

TCGA92/SCH5BB/PARA1 and PARA8(3)

SEIS re-investment relief applies for the tax years 2012-13 onward.

If an individual disposes of an asset that would give rise to a chargeable gain in 2012-13 and reinvests all or part of the amount of the gain in shares which qualify for SEIS relief, also referred to in this guidance as SEIS Income Tax relief, the amount reinvested may be exempted from Capital Gains Tax.

If an individual disposes of an asset that would give rise to a chargeable gain in 2013-14, or subsequent years, and reinvests all or part of the amount of the gain in shares which qualify for SEIS relief, half of the amount reinvested may be exempted from Capital Gains Tax.

For an investment made on or after 6 April 2023 a £200,000 limit applies for SEIS relief. Thus gains of up to £100,000 may be exempted. 

For investments made in earlier years, gains of up to £100,000 in 2012-13 and up to £50,000 for 2013-14 to 2022-23 tax years may be exempted.

Claim

Re-investment relief must be claimed. It may be claimed only by individuals and not by other persons such as companies or trustees.

Qualifying gains

The investor may claim relief against any chargeable gain arising in 2012-13 or later years on the disposal of an asset. The gain may arise at any time in the tax year. The chargeable gain is the gain after taking into account any mandatory reductions, and any other reliefs or elections claimed or made in computing the chargeable gain, but before the deduction of losses or the Annual Exempt Amount.

Qualifying Reinvestment

To claim relief the investor must subscribe for shares issued to them in respect of which they claim and receive SEIS relief. If the shares were issued before the time the chargeable gain accrued, they must still be held at that time.

If the investor makes use of the 'carry-back' facility for the purposes of SEIS relief then any claim to reinvestment relief must match the year in which the shares are then treated as issued.

For example, if the investor subscribes for shares eligible for SEIS relief that are issued in 2023-24, they may claim Income Tax relief for 2022-23 as if a specified part of that issue had instead been issued in 2022-23. SEIS re-investment relief then also has effect as if that part had been issued on a day in 2022-23. Similarly, if the investor subscribes for shares eligible for SEIS relief that are issued in 2024-25, they may claim Income Tax relief for 2023-24 as if a specified part of that issue had instead been issued in 2023-24. SEIS re-investment relief then also has effect as if that part had been issued on a day in 2023-24.