Investment tax relief calculator: 2026/27
UK EIS / SEIS Relief Calculator 2026/27
Worked examples of the 30% EIS / 50% SEIS Income Tax relief on £1,000,000 / £200,000 annual limits, the £2m Knowledge-Intensive Company uplift, the 3-year hold rule, CGT exemption on successful disposals, EIS gain-deferral relief and SEIS reinvestment relief, loss relief mechanics reducing effective downside to ~42% of nominal investment, and the £1m BPR cap from April 2026.
Overview
The Enterprise Investment Scheme (EIS, 30% Income Tax relief on up to £1m / yr) and Seed EIS (SEIS, 50% on up to £200k / yr) are the UK Government's main tax-relief schemes for equity investment in early and growth-stage trading companies. The schemes share structural mechanics: Income Tax relief delivered immediately via Self Assessment, CGT exemption on the disposal of qualifying shares after 3-year hold, loss relief on failure at marginal Income Tax or CGT rate, and IHT Business Relief after 2 years (subject to the new £1m cap from April 2026). See our full SEIS & EIS guide for the qualifying-company tests and broader structural detail.
Worked relief scenarios
Five scenarios showing Income Tax relief, exit-success outcomes (CGT exemption value) and failure outcomes (loss relief mechanics):
| Scheme | Investment | IT relief | Net cost | Exit multiple | Exit value | CGT exempt gain | Loss relief (on failure) | Notes |
|---|---|---|---|---|---|---|---|---|
| EIS | £30,000 | £9,000 | £21,000 | 3x | £90,000 | £60,000 | £8,400 | Higher-rate taxpayer investing £30k in EIS-qualifying SME. 3x exit after 5 years. |
| EIS | £50,000 | £15,000 | £35,000 | 5x | £250,000 | £200,000 | £16,450 | Additional-rate taxpayer investing £50k in EIS-qualifying SME. 5x exit (successful early-stage outcome). |
| SEIS | £30,000 | £15,000 | £15,000 | 5x | £150,000 | £120,000 | £6,000 | Higher-rate taxpayer investing £30k in SEIS-qualifying seed-stage company. 5x exit after 7 years. |
| SEIS | £100,000 | £50,000 | £50,000 | 10x | £1,000,000 | £900,000 | £23,500 | Additional-rate taxpayer maxing out SEIS at £100k (below £200k cap). 10x exit (top decile seed outcome). |
| EIS | £100,000 | £30,000 | £70,000 | 0x | £0 | -£100,000 | £32,900 | Failure scenario: company fails, shares worthless. Loss relief absorbs net cost. |
EIS / SEIS rates and limits summary
| Feature | EIS | SEIS |
|---|---|---|
| Income Tax relief | 30% | 50% |
| Annual subscriber limit | £1,000,000 (£2,000,000 KIC) | £200,000 |
| Minimum hold | 3 years | 3 years |
| CGT exemption on disposal | Full | Full |
| CGT deferral / reinvestment | Full deferral of unlimited gain | 50% of reinvested gain permanently exempt (up to £200k) |
| Loss relief | At marginal IT or CGT rate on net cost | At marginal IT or CGT rate on net cost |
| IHT Business Relief (2-year hold) | 100% (subject to £1m cap from April 2026) | 100% (subject to £1m cap from April 2026) |
| Carry-back election | 1 year (prior tax year) | 1 year (prior tax year) |
Frequently asked questions
How is EIS Income Tax relief calculated?
EIS Income Tax relief is 30% of the gross investment up to the £1,000,000 annual limit (£2,000,000 for Knowledge-Intensive Companies). The relief is delivered as an Income Tax credit on the subscriber Self Assessment return - the actual Income Tax liability for the year is reduced by the relief amount. Critical constraint: relief cannot exceed the actual Income Tax liability for the year. A subscriber with £40,000 of Income Tax liability investing £200,000 in EIS receives only £40,000 of relief that year (not the £60,000 headline 30% × £200k). The remaining £20,000 of unrelieved subscription can be carried back to the prior tax year if that year had sufficient Income Tax liability.
How is SEIS Income Tax relief calculated?
SEIS Income Tax relief is 50% of the gross investment up to the £200,000 annual limit (raised from £100,000 on 6 April 2023). Same Self Assessment delivery mechanism as EIS. The £100,000 of relief on a £200,000 SEIS investment is meaningfully larger than the equivalent EIS relief (£60,000 on £200k). SEIS targets earlier-stage companies (within 3 years of trade commencement, gross assets under £350,000 at investment) and has tighter qualifying company conditions than EIS. The 3-year hold rule and CGT exemption on disposal both apply on the same basis as EIS.
What is the carry-back election and how does it work?
EIS and SEIS Income Tax relief can be carried back to the immediately preceding tax year subject to the prior-year annual subscription limit. The election is made on the Self Assessment return for the year of subscription. For an EIS subscription in 2026/27, an investor can elect to treat the relief as relating to 2025/26 - useful when the prior year had higher Income Tax liability (one-off bonus, large capital gain, property sale). The election does not extend to two years back - only one year. SEIS works identically. The election applies to the full subscription or to a designated portion.
How does the 3-year hold rule work?
For both EIS and SEIS, the subscriber must hold the shares for at least 3 years from the date of issue (or 3 years from commencement of the company trade if later) to retain the Income Tax relief AND the CGT exemption on disposal. Selling, gifting (other than to a spouse) or otherwise disposing of the shares before the 3-year point triggers full withdrawal of the IT relief - HMRC issues a clawback assessment at the original relief rate. Death of the subscriber before the 3-year point does NOT trigger clawback. The company must also continue to qualify for the 3-year period.
What is the loss relief mechanism on failure?
If the EIS/SEIS shares become worthless (company fails), the subscriber can claim loss relief at their marginal Income Tax or CGT rate on the net cost (gross investment minus IT relief already claimed). Example: higher-rate taxpayer invests £30,000 EIS, claims £9,000 IT relief, net cost £21,000. On failure: loss relief = £21,000 × 40% = £8,400 further tax saved. Net economic loss: £30,000 - £9,000 - £8,400 = £12,600 on £30,000 nominal investment (42% of nominal vs 70% under standard equity).
How does the CGT exemption work?
Provided the EIS or SEIS shares were held for 3+ years and IT relief was claimed (and not withdrawn), the entire gain on disposal is exempt from CGT. This is among the most generous CGT reliefs in UK personal tax. For successful EIS investments the CGT exemption is the single largest source of after-tax return. A £30,000 EIS investment exiting at £90,000 (3x multiple) generates £60,000 of gain - entirely CGT-free under EIS vs roughly £14,400 of CGT at higher-rate 24% on a non-EIS equivalent. EIS gain-deferral relief is a separate parallel relief that allows ANY UK chargeable gain to be deferred by reinvesting into EIS within 1 year before to 3 years after the disposal.
What is the EIS knowledge-intensive company higher limit?
For EIS investments in Knowledge-Intensive Companies (KICs) the annual subscriber limit is £2,000,000 vs the standard £1,000,000. KIC status requires the company to meet additional R&D or innovation criteria under ITA 2007 section 252A: at least 15% of operating costs in any one of the 3 years before investment were R&D / innovation expenditure (or at least 10% across each of the 3 prior years); plus either engagement in creation of qualifying intellectual property or at least 20% of full-time employees as "skilled employees". KICs also benefit from a 10-year company age limit (vs 7 for standard EIS) and £20m company funding cap (vs £12m).
Can I combine EIS deferral relief with the Income Tax relief?
Yes - EIS deferral relief and EIS Income Tax relief are two parallel reliefs that can be claimed on the same investment. The IT relief at 30% is delivered immediately on Self Assessment. The deferral relief is claimed on a chargeable gain you want to defer - reinvesting the gain into EIS shares within 1 year before to 3 years after the original disposal. The deferred gain crystallises when the EIS shares are eventually disposed of (deferral, not exemption). The combination is particularly valuable for property investors with substantial unrealised gains: dispose of the property, reinvest into EIS, defer the CGT indefinitely while also claiming the 30% IT relief.
How does the £30,000 EIS example actually save tax?
A higher-rate taxpayer invests £30,000 in EIS shares. Income Tax relief at 30% = £9,000 reduction in Self Assessment liability. Net at-risk capital £21,000. Three outcomes possible. (1) Success 3x exit at £90,000 after 5 years: gain £60,000 CGT-exempt vs £14,400 CGT on non-EIS. Total saved = £9,000 IT + £14,400 CGT = £23,400. Net profit £90,000 - £21,000 = £69,000 (332% return on at-risk capital). (2) Modest 1.5x exit at £45,000: still tax-favoured because IT relief is retained and the £15,000 gain is CGT-exempt. (3) Failure to £0: loss relief at 40% on £21,000 net cost = £8,400. Net loss £12,600 (42% of nominal vs 100% on non-EIS equity). The asymmetry between capped downside and uncapped upside is the structural reason EIS portfolios can deliver strong risk-adjusted returns.
How do I make a SEIS or EIS investment?
Three routes. (1) Direct investment in a single qualifying company. Subscribe for shares under an EIS/SEIS-compliant share offer; ensure Advance Assurance is in place; receive EIS3/SEIS3 certificate 4-6 months after share issue. (2) EIS/SEIS managed fund. Subscribe to a fund (Octopus, Triple Point, Albion, Mercia, Calculus, others) that invests across a diversified portfolio. Fund fees typically 1.5-2.5% AMC + 20% performance fee above hurdle. (3) Approved EIS Knowledge-Intensive Fund. Structurally similar to (2) but with HMRC-approved fund status providing more flexibility on the carry-back election. Most retail investors use the fund route for diversification.
What are the risks?
EIS and SEIS investments are HIGH-RISK by design. UK angel-investment data suggests 40-60% of SEIS-stage investments result in total loss, with successful investments offsetting failures across diversified portfolios. Specific risks: (1) Company fails - loss relief reduces but does not eliminate downside; (2) Company ceases to qualify mid-period - HMRC clawback of IT relief; (3) Disposal before 3-year clock - full IT relief clawback; (4) Liquidity - EIS/SEIS shares are unquoted and typically illiquid until exit event; (5) Fund manager quality - performance varies substantially. FCA-regulated investment advice required for retail investors below the £100,000 income or £250,000 net assets HNW thresholds.
How does IHT Business Relief interact?
EIS and SEIS shares qualify for 100% Business Relief from Inheritance Tax once held for at least 2 years (the standard BR 2-year holding period). Critical: from 6 April 2026 the new £1m combined BR/APR cap applies - shares above the £1m cap attract only 50% relief (effective 20% IHT rate on the excess). EIS/SEIS portfolios above the £1m cap (combined with any other BR/APR-eligible assets such as private trading company shares or agricultural property) face the reduced rate from 2026. See our BPR/APR April 2026 changes guide for full structural detail.
Related calculators and guides
- SEIS & EIS guide - full structural detail and qualifying-company tests.
- CGT calculator - general UK CGT and EIS deferral interaction.
- UK CGT rules guide - rates, exemptions and BADR schedule.
- BPR/APR April 2026 changes - £1m cap impact on EIS/SEIS BR.
- Dividend calculator - dividend tax for distributions from EIS-funded companies before exit.
- UK R&D Tax Credit guide - complementary company-level relief for EIS-funded R&D activity.
- Family Investment Companies (FIC) - post-exit wealth planning vehicle.
- Employee share schemes - EMI for founder/team equity at the same companies.