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HMRC internal manual

Venture Capital Schemes Manual

Seed Enterprise Investment Scheme (SEIS): Re-investment Relief: reduction in income tax relief attributable to shares before re investment relief obtained

TCGA92/SCH5BB/PARA2 (3) & (4)

Chapter 6 Part 5A ITA07 provides for the entitlement to SEIS Income Tax relief to be reduced, for example, if the investor within a certain period receives value from the issuing company. If the relief has been reduced before the re-investment relief is obtained, you limit the amount of SEIS expenditure which may be set against the gain, see VCM45080, by applying the fraction:



R1 = the amount of SEIS Income Tax relief attributable to shares when the re-investment relief is obtained.

R2= the amount of SEIS Income Tax relief which would have been so attributable in the absence of the reduction.

For the consequences should SEIS Income Tax relief be reduced or withdrawn after the relief has been obtained, see VCM45090.

Should both sub-paragraphs (2) and (4) of paragraph 2 Schedule 5BB apply, you use the formula (SA/TSA) x £100,000, see VCM45050, before applying the fraction R1/R2.