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HMRC internal manual

Venture Capital Schemes Manual

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HM Revenue & Customs
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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 and 2013-14 only.

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 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.

A £100,000 limit applies for SEIS relief. Thus gains of up to £100,000 may be exempted for 2012-13 and up to £50,000 for 2013-14.

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 in 2013-14 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 for 2012-13 the investor must subscribe for shares issued to them in 2012-13 in respect of which they claim and receive SEIS relief for that year. If the shares were issued before the time the chargeable gain accrued, they must still be held at that time.

To claim relief for 2013-14 the investor must subscribe for shares issued to them in 2013-14 in respect of which they claim and receive SEIS relief for that year. If the shares were issued before the time the chargeable gain accrued, they must still be held at that time

If the investor subscribes for shares eligible for SEIS relief that are issued in 2013-14, they may claim Income Tax relief for 2012-13 as if a specified part of that issue had instead been issued in 2012-13. SEIS re-investment relief then also has effect as if that part had been issued on a day in 2012-13. Similarly, if the investor subscribes for shares eligible for SEIS relief that are issued in 2014-15, they may claim Income Tax relief for 2013-14 as if a specified part of that issue had instead been issued in 2013-14. SEIS re-investment relief then also has effect as if that part had been issued on a day in 2013-14.