UK SEIS & EIS investor guide: 2026/27

UK SEIS & EIS Investor Deep-Dive (2026/27): Tax Reliefs Worked

Q: What is EIS and how does it differ from SEIS?

Enterprise Investment Scheme (Part 5 ITA 2007). For early-stage UK companies BIGGER than SEIS-qualifying (Section 158 ITA 2007). 30% Income Tax relief (vs SEIS 50%) on investments up to £1,000,000/year (£2,000,000 for Knowledge Intensive Companies). 3-year holding period - same as SEIS. CGT EXEMPT on disposal after 3 years - same. CGT DEFERRAL relief (NOT exemption): defer 100% of any other CGT gain by reinvesting in EIS shares (Section 150 ITA 2007). Deferred CGT becomes payable when EIS shares are disposed of. Loss relief : same as SEIS - marginal IT rate on net loss. IHT 100% Business Relief after 2 years (subject to April 2026 BPR cap). Companies qualifying for EIS: UK-resident, under 7 years trading (10 years for KICs), <250 employees (500 for KICs), <£15m gross assets (£20m for KICs), in qualifying trade. EIS targets bigger / more mature startups than SEIS. Often used in successor rounds after a SEIS round.

Q: What is a Knowledge Intensive Company (KIC)?

EIS-eligible companies meeting specific R&D-intensity criteria. Defined in Section 252A ITA 2007. Tests : (a) at least 10% of operating costs spent on R&D in the relevant 3-year period, OR (b) at least 15% in any one of the previous 3 years; (c) at least 20% of full-time-equivalent employees engaged in research roles; (d) intellectual property arising from R&D forms part of trade activity. Common KICs: deep-tech startups (biotech, semiconductor, climate tech, advanced materials), university spinouts, drug discovery companies. Benefits over standard EIS : investor £1m → £2,000,000 annual cap; company 7 → 10 years trading limit; company 250 → 500 employees limit; company £15m → £20m gross assets limit. The KIC framework was introduced to channel SEIS/EIS capital toward R&D-intensive sectors where UK has competitive advantage. Verify KIC status via HMRC Advance Assurance application before investing - lets the company confirm KIC eligibility for investor confidence.

Q: How does carry-back to the previous tax year work?

SEIS + EIS investments can be CARRIED BACK and treated as made in the PREVIOUS tax year (Section 158 + 257AC ITA 2007). Election made on the SA tax return for the previous year. Use case : bonus-driven year-end with high marginal rate; next year reduced income; carry back captures the higher relief. Worked example : SEIS £50k investment made April 2026 (tax year 2026/27). Income in 2025/26 was £200k (additional-rate), 2026/27 will be £80k (higher-rate). Carry back the SEIS to 2025/26: 50% IT relief = £25k offsetting 2025/26 additional-rate liability. Allocation gives ~£3k more relief vs claiming in 2026/27 because of the marginal-rate difference. Constraints : must have paid sufficient tax in the carry-back year. Cannot exceed the £200k SEIS / £1m EIS annual cap in the carry-back year (combined with any other investments). Cannot stack multiple carry-back years - just one previous year. Filing : include the investment + carry-back election on the prior-year SA return before filing deadline. EIS3 / SEIS3 certificates required from the company before claiming.

Q: What is the 30% "material interest" rule?

Anti-avoidance rule preventing founders / employees / connected parties from claiming SEIS / EIS relief on their own company shares (Section 170 + 257BB ITA 2007). Test : investor must not (directly or indirectly) hold more than 30% of the share capital, voting rights, OR rights to assets on winding up, during the relevant qualifying period (start of investment through to disposal). "Connected" person tests : spouse / parent / child / sibling shareholdings ALL count toward the 30% threshold. Employees + directors getting share options through standard EMI / CSOP / SAYE schemes can avoid the rule if their material interest stays under 30%. Common pitfalls : founder investing further capital can lose ALL EIS relief if combined holding exceeds 30%; family-member co-investment may exceed the limit unexpectedly; previous angel investors who follow-on in larger rounds. Workaround : founders take EMI options instead of EIS shares (no 30% restriction; EMI gets BADR 14% CGT instead of EIS-equivalent exemption). Angels structure to stay below 30% individually + via connected persons. SEIS Advance Assurance helps confirm eligibility pre-investment.

Q: What is the loss relief mechanism?

If your SEIS / EIS investment FAILS (company liquidates / shares are worth nothing), you can claim loss relief on the NET loss at your marginal IT rate. Net loss = original investment - IT relief already claimed. SEIS worked example : £100k SEIS investment with 50% IT relief = £50k IT claimed at the time. Net out-of-pocket cost = £50k. Company fails after 3 years. Net loss £50k. As additional-rate investor: claim £50k × 45% = £22,500 loss relief against income (Section 131 ITA 2007). Total tax-protected: £50k IT + £22.5k loss = £72.5k of £100k investment. Real cash loss: £27.5k. EIS worked example : £100k EIS at 30% = £30k IT relief. Net out-of-pocket £70k. Failure: £70k × 45% = £31.5k loss relief. Total tax-protected: £30k IT + £31.5k loss = £61.5k. Real cash loss: £38.5k. Loss relief options : against INCOME in current year, against income in PRIOR year (carry-back), or against capital gains (Section 132 ITA 2007). Choose whichever bracket gives best rate. Genuine bankruptcies + dissolutions are clearly losses; "share is worthless but company still exists" needs "negligible value claim" via Section 24 TCGA 1992.

Q: Inheritance Tax 100% Business Relief - is it changing?

EIS + SEIS shares qualify for IHT Business Relief (formerly Business Property Relief, BPR) at 100% after 2 years' holding (Section 105 IHTA 1984). Means: shares passing on death are completely IHT-free, regardless of estate value. BUT - APRIL 2026 REFORM : Autumn Budget 2024 capped BPR at £1m of qualifying assets per estate from April 2026. Above £1m: only 50% relief (rather than 100%). For wealthy investors with large EIS portfolios, this is a major change. Specifically: AIM shares (which used to qualify for BPR similar to EIS) are reduced to 50% BPR from April 2026. EIS / SEIS unlisted shares still qualify for 100% BPR up to the £1m cap, then 50% above. Worked impact : £2m of EIS shares held 10 years, passing on death post-April 2026. £1m at 100% BPR (zero IHT), £1m at 50% BPR (£200k IHT charged at 40% × £500k taxable). Compared to pre-April-2026 zero IHT. Major planning implication: wealthy investors are spreading EIS holdings across spouses (each gets £1m BPR cap), accelerating IHT planning gifts, or accepting the additional liability. See our BPR & APR April 2026 changes for full reform detail.

Q: How does the 3-year holding period work?

IT relief is CLAWED BACK if you dispose of the shares within 3 years of the date of investment (Section 209 ITA 2007). Exceptions: disposal due to investor's death (no clawback); company-initiated buy-back / liquidation (no clawback if company has effectively failed); EIS company "Disposal of all qualifying shares" within 3 years triggers full clawback - investor returns the 30% / 50% IT relief to HMRC + interest. Worked clawback : SEIS £100k investment, £50k IT relief claimed. Sold after 18 months. Clawback = £50k × (18 / 36 months remaining) × 50% rate = £50k × proportional clawback. Plus interest from original year. CGT exemption preservation : 3+ year disposal = CGT exempt on gain; under-3-year = standard CGT applies (24% on residential property style, but no separate "punishment" for the CGT side beyond losing the exemption). Counting the 3 years : from the date the company ISSUED the shares to you, not the date you signed the term sheet. Typically a 6-12 week gap between signing and actual share issuance. Plan accordingly when targeting a disposal date.

Q: SEIS / EIS vs VCT - which is better?

Venture Capital Trusts (VCTs) are PUBLIC LISTED funds that invest in early-stage UK companies. Investor buys VCT shares on the public market (rather than direct in startup). Tax reliefs : 30% IT relief on investments up to £200k/year (Section 261 ITA 2007); dividend income from VCT shares tax-free; 5-year holding period (longer than EIS 3-year); CGT exempt on disposal of VCT shares. VCT vs EIS direct comparison : Risk: VCT lower (diversified across many startups) vs EIS higher (single company) Liquidity: VCT can be sold on stock exchange (some liquidity) vs EIS shares illiquid until sale Returns: VCT typically 4-7% dividend yield + modest capital growth vs EIS huge upside if startup succeeds Holding period: VCT 5 years vs EIS 3 years Investment minimum: VCT often £5k+ vs EIS often £25-100k+ VCT suits passive HNW investors wanting diversified early-stage exposure + tax efficiency. EIS / SEIS suits more active investors wanting concentrated startup bets + maximum upside. Many wealthy investors hold both. Specialist financial advice essential before either route.

Q: How do I claim SEIS / EIS relief on my tax return?

Three-step process. (1) Company provides EIS3 / SEIS3 certificate : HMRC-approved form issued by the investee company after share issuance + HMRC eligibility confirmation. Typically takes 6-12 months from investment to receive. (2) Claim on Self Assessment : enter the investment + relief amount on SA101 (Additional Information) supplementary pages of the SA100 return. Include the EIS3 / SEIS3 certificate reference numbers. (3) Optional advance request via Form EIS1 / SEIS1 : if you want IT relief BEFORE filing the next SA return, request a tax code adjustment via HMRC Personal Tax Account. Allows the relief to flow through PAYE earlier. Common error : investing in 2026/27 expecting immediate IT relief, but the EIS3 certificate doesn't arrive until 2027 - by which time the 2026/27 SA filing deadline has passed. Solutions: (a) file the claim on subsequent return with the carry-back election; (b) write to HMRC requesting a section 257AC amendment. Keep ALL records: investment documents, EIS3 certificates, SA return copies, for at least 6 years.

Comprehensive UK SEIS / EIS guide for 2026/27. SEIS 50% Income Tax relief on investments up to £200,000/year (Part 5A ITA 2007). EIS 30% IT relief up to £1,000,000 (or £2,000,000 for Knowledge Intensive Companies / KICs - Part 5 ITA 2007). 3-year holding period, 30% material interest rule, CGT exemption + EIS CGT deferral, loss relief at marginal rate. IHT 100% Business Relief (subject to April 2026 £1m cap reform). VCT alternative for diversified passive investors. 4 worked investor scenarios from £50k success to £100k full wipeout.

SEIS vs EIS vs EIS-KIC at a glance

Feature	SEIS	EIS	EIS-KIC
Income Tax relief	50%	30%	30%
Annual investor cap	£200,000	£1,000,000	£2,000,000
Holding period	3 years	3 years	3 years
CGT on disposal	Exempt	Exempt	Exempt
CGT reinvestment	50% exempt	100% deferred	100% deferred
Loss relief	Marginal IT rate	Marginal IT rate	Marginal IT rate
Material interest limit	30%	30%	30%
Company trading age limit	3 years	7 years	10 years
Company gross assets limit	£350k	£15m	£20m
Company employee limit	25	250	500
Total raise limit	£250k lifetime	£12m	£20m

4 worked investor scenarios

Scenario	Investment	IT relief	Loss relief (if wipeout)	Net outcome	Tax-protected
SEIS £50k higher-rate, 2x exit SEIS investor £50k → 50% IT relief £25k upfront. Sells at £100k after 3y - CGT exempt. Net: £25k cost for £100k.	£50,000	£25,000	—	+£75,000	£25,000 (50%)
EIS £100k additional-rate, flat EIS investor £100k → 30% IT relief £30k. Sells at par £100k after 3y - no CGT. Net cost £70k for £100k = £30k benefit.	£100,000	£30,000	—	+£30,000	£30,000 (30%)
EIS £200k with £50k deferred CGT EIS £200k → 30% IT £60k + defer £50k CGT (saves £12k now; £24k payable on EIS exit). 3x exit £600k tax-free.	£200,000	£60,000	—	+£472,000	£60,000 (30%)
SEIS £100k full wipeout SEIS £100k → 50% IT relief £50k upfront. Investment fails after 3y - claim loss relief on £50k net = £20k at 40%. Total saved £70k of £100k.	£100,000	£50,000	£20,000	-£30,000	£70,000 (70%)

"Tax-protected" = IT relief + loss relief as a percentage of original investment. Even in a total wipeout, SEIS additional-rate investors get back ~72% of capital via tax reliefs; EIS investors get ~62%. Combined with the 3x-5x upside potential of successful startups, the asymmetric risk/return makes SEIS / EIS attractive for HNW investors despite the high underlying business failure rate (~60-70% of startups fail).

5 tax reliefs that stack on SEIS / EIS

Income Tax relief: SEIS 50% / EIS 30% on the investment amount, claimed in year of investment (or carried back to prior year via Section 158 / 257AC ITA 2007).
CGT exemption on disposal: any gain on SEIS / EIS shares held 3+ years is completely CGT-free (Section 150A TCGA 1992).
CGT deferral / reinvestment relief: SEIS gives 50% exemption on other CGT gains reinvested in SEIS (capped at the SEIS investment); EIS gives 100% DEFERRAL (gain becomes payable when EIS shares disposed of).
Loss relief: failed investment generates a loss claimable at marginal IT rate against current-year or prior-year income, OR against capital gains. Section 131-132 ITA 2007.
Inheritance Tax Business Relief: 100% IHT relief after 2 years' holding (subject to April 2026 £1m cap reform - see BPR/APR guide). Section 105 IHTA 1984.

April 2026 BPR reform - IHT impact

Major change for wealthy EIS investors: from 6 April 2026 (Autumn Budget 2024), Business Property Relief is CAPPED at £1m of qualifying assets per estate. Above £1m of EIS / unlisted shares: 50% relief instead of 100%. AIM-listed shares (which used to qualify for 100% BPR similar to EIS) are reduced to 50% from the same date.

Impact on EIS investors: £2m of EIS shares held 10 years, passing on death post-April 2026. £1m at 100% BPR (zero IHT), £1m at 50% BPR (£200k IHT charged at 40% × £500k taxable). Compared to pre-April-2026 zero IHT. Planning responses: spread EIS holdings across spouses (each gets £1m BPR cap); accelerate IHT planning gifts; consider EIS exit pre-2026 to crystallise tax-free gain; structure holding via discretionary trusts. See our BPR & APR April 2026 changes for full reform analysis.

Frequently asked questions

What is SEIS and what does it offer?

Seed Enterprise Investment Scheme (Part 5A ITA 2007). For very early-stage UK companies (typically £200k-£2m valuation). 50% Income Tax relief on investments up to £200,000/year (raised from £100k in April 2023). 3-year holding period - sell before 3 years and IT relief is clawed back proportionally. CGT EXEMPT on disposal after 3 years - any gain on SEIS shares is tax-free. CGT REINVESTMENT RELIEF: defer 50% of any other CGT gain by investing it in SEIS shares (Section 257AB ITA 2007). Loss relief: if SEIS company fails, claim the loss at your marginal IT rate (40-45%) against income OR capital gains. IHT 100% Business Relief after 2 years (subject to April 2026 changes - see BPR reform). Combined max relief at additional-rate: 50% IT + 25% CGT reinvest (half of 50%) + 22.5% loss relief = up to 97.5% protected. Companies must be UK-resident, under 3 years trading, <25 employees, <£350k gross assets, in qualifying trade (excludes most financial services, property, asset-backed).

What is EIS and how does it differ from SEIS?

Enterprise Investment Scheme (Part 5 ITA 2007). For early-stage UK companies BIGGER than SEIS-qualifying (Section 158 ITA 2007). 30% Income Tax relief (vs SEIS 50%) on investments up to £1,000,000/year (£2,000,000 for Knowledge Intensive Companies). 3-year holding period - same as SEIS. CGT EXEMPT on disposal after 3 years - same. CGT DEFERRAL relief (NOT exemption): defer 100% of any other CGT gain by reinvesting in EIS shares (Section 150 ITA 2007). Deferred CGT becomes payable when EIS shares are disposed of. Loss relief: same as SEIS - marginal IT rate on net loss. IHT 100% Business Relief after 2 years (subject to April 2026 BPR cap). Companies qualifying for EIS: UK-resident, under 7 years trading (10 years for KICs), <250 employees (500 for KICs), <£15m gross assets (£20m for KICs), in qualifying trade. EIS targets bigger / more mature startups than SEIS. Often used in successor rounds after a SEIS round.

What is a Knowledge Intensive Company (KIC)?

EIS-eligible companies meeting specific R&D-intensity criteria. Defined in Section 252A ITA 2007. Tests: (a) at least 10% of operating costs spent on R&D in the relevant 3-year period, OR (b) at least 15% in any one of the previous 3 years; (c) at least 20% of full-time-equivalent employees engaged in research roles; (d) intellectual property arising from R&D forms part of trade activity. Common KICs: deep-tech startups (biotech, semiconductor, climate tech, advanced materials), university spinouts, drug discovery companies. Benefits over standard EIS: investor £1m → £2,000,000 annual cap; company 7 → 10 years trading limit; company 250 → 500 employees limit; company £15m → £20m gross assets limit. The KIC framework was introduced to channel SEIS/EIS capital toward R&D-intensive sectors where UK has competitive advantage. Verify KIC status via HMRC Advance Assurance application before investing - lets the company confirm KIC eligibility for investor confidence.

How does carry-back to the previous tax year work?

SEIS + EIS investments can be CARRIED BACK and treated as made in the PREVIOUS tax year (Section 158 + 257AC ITA 2007). Election made on the SA tax return for the previous year. Use case: bonus-driven year-end with high marginal rate; next year reduced income; carry back captures the higher relief. Worked example: SEIS £50k investment made April 2026 (tax year 2026/27). Income in 2025/26 was £200k (additional-rate), 2026/27 will be £80k (higher-rate). Carry back the SEIS to 2025/26: 50% IT relief = £25k offsetting 2025/26 additional-rate liability. Allocation gives ~£3k more relief vs claiming in 2026/27 because of the marginal-rate difference. Constraints: must have paid sufficient tax in the carry-back year. Cannot exceed the £200k SEIS / £1m EIS annual cap in the carry-back year (combined with any other investments). Cannot stack multiple carry-back years - just one previous year. Filing: include the investment + carry-back election on the prior-year SA return before filing deadline. EIS3 / SEIS3 certificates required from the company before claiming.

What is the 30% "material interest" rule?

Anti-avoidance rule preventing founders / employees / connected parties from claiming SEIS / EIS relief on their own company shares (Section 170 + 257BB ITA 2007). Test: investor must not (directly or indirectly) hold more than 30% of the share capital, voting rights, OR rights to assets on winding up, during the relevant qualifying period (start of investment through to disposal). "Connected" person tests: spouse / parent / child / sibling shareholdings ALL count toward the 30% threshold. Employees + directors getting share options through standard EMI / CSOP / SAYE schemes can avoid the rule if their material interest stays under 30%. Common pitfalls: founder investing further capital can lose ALL EIS relief if combined holding exceeds 30%; family-member co-investment may exceed the limit unexpectedly; previous angel investors who follow-on in larger rounds. Workaround: founders take EMI options instead of EIS shares (no 30% restriction; EMI gets BADR 14% CGT instead of EIS-equivalent exemption). Angels structure to stay below 30% individually + via connected persons. SEIS Advance Assurance helps confirm eligibility pre-investment.

What is the loss relief mechanism?

If your SEIS / EIS investment FAILS (company liquidates / shares are worth nothing), you can claim loss relief on the NET loss at your marginal IT rate. Net loss = original investment - IT relief already claimed. SEIS worked example: £100k SEIS investment with 50% IT relief = £50k IT claimed at the time. Net out-of-pocket cost = £50k. Company fails after 3 years. Net loss £50k. As additional-rate investor: claim £50k × 45% = £22,500 loss relief against income (Section 131 ITA 2007). Total tax-protected: £50k IT + £22.5k loss = £72.5k of £100k investment. Real cash loss: £27.5k. EIS worked example: £100k EIS at 30% = £30k IT relief. Net out-of-pocket £70k. Failure: £70k × 45% = £31.5k loss relief. Total tax-protected: £30k IT + £31.5k loss = £61.5k. Real cash loss: £38.5k. Loss relief options: against INCOME in current year, against income in PRIOR year (carry-back), or against capital gains (Section 132 ITA 2007). Choose whichever bracket gives best rate. Genuine bankruptcies + dissolutions are clearly losses; "share is worthless but company still exists" needs "negligible value claim" via Section 24 TCGA 1992.

Inheritance Tax 100% Business Relief - is it changing?

EIS + SEIS shares qualify for IHT Business Relief (formerly Business Property Relief, BPR) at 100% after 2 years' holding (Section 105 IHTA 1984). Means: shares passing on death are completely IHT-free, regardless of estate value. BUT - APRIL 2026 REFORM: Autumn Budget 2024 capped BPR at £1m of qualifying assets per estate from April 2026. Above £1m: only 50% relief (rather than 100%). For wealthy investors with large EIS portfolios, this is a major change. Specifically: AIM shares (which used to qualify for BPR similar to EIS) are reduced to 50% BPR from April 2026. EIS / SEIS unlisted shares still qualify for 100% BPR up to the £1m cap, then 50% above. Worked impact: £2m of EIS shares held 10 years, passing on death post-April 2026. £1m at 100% BPR (zero IHT), £1m at 50% BPR (£200k IHT charged at 40% × £500k taxable). Compared to pre-April-2026 zero IHT. Major planning implication: wealthy investors are spreading EIS holdings across spouses (each gets £1m BPR cap), accelerating IHT planning gifts, or accepting the additional liability. See our BPR & APR April 2026 changes for full reform detail.

How does the 3-year holding period work?

IT relief is CLAWED BACK if you dispose of the shares within 3 years of the date of investment (Section 209 ITA 2007). Exceptions: disposal due to investor's death (no clawback); company-initiated buy-back / liquidation (no clawback if company has effectively failed); EIS company "Disposal of all qualifying shares" within 3 years triggers full clawback - investor returns the 30% / 50% IT relief to HMRC + interest. Worked clawback: SEIS £100k investment, £50k IT relief claimed. Sold after 18 months. Clawback = £50k × (18 / 36 months remaining) × 50% rate = £50k × proportional clawback. Plus interest from original year. CGT exemption preservation: 3+ year disposal = CGT exempt on gain; under-3-year = standard CGT applies (24% on residential property style, but no separate "punishment" for the CGT side beyond losing the exemption). Counting the 3 years: from the date the company ISSUED the shares to you, not the date you signed the term sheet. Typically a 6-12 week gap between signing and actual share issuance. Plan accordingly when targeting a disposal date.

SEIS / EIS vs VCT - which is better?

Venture Capital Trusts (VCTs) are PUBLIC LISTED funds that invest in early-stage UK companies. Investor buys VCT shares on the public market (rather than direct in startup). Tax reliefs: 30% IT relief on investments up to £200k/year (Section 261 ITA 2007); dividend income from VCT shares tax-free; 5-year holding period (longer than EIS 3-year); CGT exempt on disposal of VCT shares. VCT vs EIS direct comparison:

Risk: VCT lower (diversified across many startups) vs EIS higher (single company)
Liquidity: VCT can be sold on stock exchange (some liquidity) vs EIS shares illiquid until sale
Returns: VCT typically 4-7% dividend yield + modest capital growth vs EIS huge upside if startup succeeds
Holding period: VCT 5 years vs EIS 3 years
Investment minimum: VCT often £5k+ vs EIS often £25-100k+

VCT suits passive HNW investors wanting diversified early-stage exposure + tax efficiency. EIS / SEIS suits more active investors wanting concentrated startup bets + maximum upside. Many wealthy investors hold both. Specialist financial advice essential before either route.

How do I claim SEIS / EIS relief on my tax return?

Three-step process. (1) Company provides EIS3 / SEIS3 certificate: HMRC-approved form issued by the investee company after share issuance + HMRC eligibility confirmation. Typically takes 6-12 months from investment to receive. (2) Claim on Self Assessment: enter the investment + relief amount on SA101 (Additional Information) supplementary pages of the SA100 return. Include the EIS3 / SEIS3 certificate reference numbers. (3) Optional advance request via Form EIS1 / SEIS1: if you want IT relief BEFORE filing the next SA return, request a tax code adjustment via HMRC Personal Tax Account. Allows the relief to flow through PAYE earlier. Common error: investing in 2026/27 expecting immediate IT relief, but the EIS3 certificate doesn't arrive until 2027 - by which time the 2026/27 SA filing deadline has passed. Solutions: (a) file the claim on subsequent return with the carry-back election; (b) write to HMRC requesting a section 257AC amendment. Keep ALL records: investment documents, EIS3 certificates, SA return copies, for at least 6 years.

What happens if the EIS / SEIS company goes through follow-on rounds?

Original EIS / SEIS investor's relief is generally preserved through follow-on rounds, with some caveats. "Initial investing period" rules: SEIS-eligible status of company runs out after 3 years' trading; EIS after 7 years (10 for KICs). New investment AFTER the company exceeds these limits is NOT EIS / SEIS-eligible, but ORIGINAL investments retain their relief if the 3-year holding requirement is met. Dilution: follow-on rounds can dilute the original investor's percentage. Doesn't affect IT relief but may affect 30% material interest threshold if original investor was close to the limit + does NOT participate in the new round (their % drops). "Initial risk finance period" (EIS): company can only raise total of £12m EIS / SEIS / VCT capital lifetime (£20m for KICs), and only within first 7 (or 10) years. Exceeded? Subsequent rounds not eligible. "Funded under SEIS" vs "Funded under EIS": each company can have BOTH (typically SEIS first, then EIS later). The same investor can claim relief on both schemes separately if invested at different times.

What investments don't qualify for SEIS / EIS?

Excluded activities (Section 192 + 257HJ ITA 2007). Companies trading in: financial services (banking, insurance, money lending, hire purchase, accountancy, investment management, securities dealing); property + land development; hotels (mostly); nursing homes + residential care; coal, steel, shipbuilding (state-aid restricted sectors); legal services + corporate finance advisory; farming + market gardening (mostly); forestry + timber extraction; oil + gas extraction. Asset-backed schemes: companies whose value is primarily land / buildings / intellectual property licensing - HMRC challenges as "investment" rather than "trading". Connected investments: SEIS / EIS shares + a loan to the same company in the same period = relief reduced by the loan amount; can be re-instated by repaying the loan. Reciprocal investments: two investors agreeing to invest in each other's companies to game the relief = entirely disqualified. Advance Assurance: HMRC's pre-investment confirmation service (free) lets companies confirm SEIS / EIS eligibility before raising capital. Strongly recommended - many investors require AA confirmation before committing. AA letter typically takes 3-6 months from application.

EIS / SEIS relief calculator - interactive worked relief calc.
SEIS & EIS narrative guide - existing narrative overview.
BPR & APR April 2026 reform - £1m cap on IHT business relief.
Capital Gains Tax calculator - CGT mechanics + deferral.
CGT allowance £3,000 guide - AEA mechanics.
IHT couple calculator - £1m couple allowance.
Higher-rate tax 40% guide - reliefs that reduce higher-rate burden.
Gift Aid higher-rate claim - parallel ANI-reduction strategy.
Family Investment Companies (FIC) - HNW IHT planning structures.