Claiming Seed Enterprise Investment Scheme Income Tax Relief

So you have made your investment in a Seed Enterprise Investment Scheme (SEIS) company and want to claim your 50% income tax relief.

This quick guide tells you how to go about snatching back that tax relief.

Get your SEIS 3 form

This is an important piece of paper. Without a SEIS 3 you cannot make a claim for tax relief, so make sure you have the original form and keep it.

Joint share owners each need their own SEIS 3 form

Keep the form for at least six years from claiming tax relief, so a SEIS 3 issued in the 2013 -14 tax year should be filed until at least the end of the 2020-2021 tax year.

No SEIS 3 form when tax return is submitted

If you don’t have a SEIS 3, then income tax relief cannot be claimed. Wait until you get the form and use the claim section. Don’t hold your tax return back past January 31 or you will pick up fines and penalties for late filing.

What to put on your tax return

Put the total of your SEIS investments in the tax year in Box 11, page AI2 of your tax return – but the figure should be no more than £100,000 even if you have invested more.

Put the following details in Box 19 on page TR7:

  • The name of the SEIS company
  • The total relief claimed
  • The date SEIS shares were issued
  • The HMRC SEIS reference and authorising office
  • If more than £100,000 was paid for the shares on which SEIS relief is claimed, how you envisage the relief works out

List all investments in SEIS companies, even if the total exceeds £100,000.

Who can claim SEIS relief?

Most investors can put in a claim for income tax relief, except:

  • If the SEIS is designed as a tax avoidance scheme
  • The investor has a substantial interest in the company and tries to invest via a third party
  • The company offers a loan on advantageous terms after a SEIS investment that would not be available without subscribing to SEIS shares
  • The SEIS offers some sort of guaranteed return on the investment or option to buy back shares
  • The investor or an associate is a SEIS company employee
  • The investor or their associates have a substantial interest in the company

A ‘substantial interest’ is:

  • Having control of the company
  • Owning 30% or more of the share capital
  • Holding 30% or more of the votes in the company
  • Having the right to 30% or more of company’s assets on winding up

An ‘associate’ is a spouse, civil partner, relative, business partner or someone the investor is connected to in a trust

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