Question on SEIS tax relief

So I am looking to invest in a company that is eligible for SEIS tax relief for 50% of the investment amount.

I wanted to check about how this relief would work for me.

50% of the investment value is actually more than the amount of income tax I will have paid this tax year. So if I were to claim SEIS tax relief for only this tax year it would not cover the whole 50% of the investment.

Is SEIS relief able to be claimed for example next tax year when I will have paid enough income tax to account for 50% of the investment? Or can you only claim the relief for the year in which the shares are issued?

Hi, I can be wrong as I’m not an account nor have been investing in SEIS companies for a while but as far as I understand, SEIS works in the same way that EIS tax relief, with the different of 50% relief instead of 30% and have a small amount available to invest.

If you got the certificate in 2020/2021 tax year you have 5 years to use the relief and after you have used to relief all your income tax HMRC will owe the difference.

You cannot offset against next year’s tax but you can use the previous year. If you invested in 2021/22, you can make a partial claim on your 2021/22 tax return (or call HMRC and ask for guidance if you do not file returns) with the balance carried back to 2020/21. If you do not have sufficient tax in both years combined, then the remaining relief is lost.

However, provided that you hold the shares beyond the termination date, your entire gain will nevertheless be free of tax.

Your timeframe to make a claim is five years, but the relief can only be used in the year of investment or the preceding year.

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Thanks for the clearing that up its appreciated.

Looks like I’ll lose out on a couple hundred pounds of tax relief from the investment as I paid no income tax last year.

Thanks for the explanation. It looks i understood it all wrongly, :sweat_smile: