Tax treatment depends on individual circumstances and may change
Last updated: July 2026 · Reviewed by the SyndicateRoom investment team
The Seed Enterprise Investment Scheme (SEIS) gives UK investors 50% income tax relief on up to £200,000 invested each tax year into qualifying pre-seed and seed-stage companies, plus capital gains tax (CGT) exemption on growth after three years and 50% CGT reinvestment relief. A record £276 million was invested through SEIS in 2024-25 (HMRC, May 2026).
SEIS investment hit its highest level on record in 2024-25 — £276 million into 2,430 companies, up 14% on the year before (HMRC, May 2026). The scheme's April 2023 expansion did what it was designed to do: more capital is now moving to the earliest stage of UK venture, where the reliefs are most generous. Here is how the scheme works for the 2026/27 tax year, what it's worth in practice, and how to invest through it.
SEIS is a venture capital scheme introduced by the UK government in 2012 to help very early-stage (pre-seed and seed) companies raise equity funding. In exchange for backing companies at the riskiest stage of their life, investors receive the most generous package of tax reliefs available in the UK.
Unlike its older sibling the Enterprise Investment Scheme, SEIS has no sunset clause — the scheme is permanent, which gives investors and companies long-term certainty.
In every tax year since 2013/14, over £150 million has been invested through SEIS. The 2024-25 total of £276 million is the scheme's record year (HMRC, May 2026) — the latest SEIS statistics are collected on our annually updated reference page.
SEIS offers five distinct reliefs. Reliefs apply to a maximum of £200,000 invested per investor, per tax year.
Income tax relief of 50%.
Invest £10,000 and reduce your income tax bill by £5,000. You can apply the relief to the year of investment or carry it back to the previous tax year.
Capital gains tax exemption. Growth on SEIS shares held for at least three years is free of CGT when you sell (provided you have claimed income tax relief).
CGT reinvestment relief. Reduce a capital gains tax bill by 50% by investing an amount equal to the gain in SEIS.
Loss relief. If a company in your portfolio falls in value, you can offset the at-risk capital against income tax or capital gains.
Inheritance tax relief. SEIS shares qualify for inheritance tax relief via Business Relief once held for two years, within the £2.5 million per-person Business Relief cap that applies from 6 April 2026.
The minimum holding period for the income tax and CGT reliefs is three years. HMRC will claw back relief on shares sold before then.
Tax treatment depends on individual circumstances and may be subject to change. The availability of tax relief depends on the company maintaining its qualifying status.
The examples below are illustrations only, not advice or a projection of returns. They assume an additional-rate (45%) income taxpayer with a £24,000 capital gains tax bill from selling a second home (24% residential CGT rate, 2026/27). Most early-stage companies fail — the first scenario is the most likely outcome for any single company.
A £10,000 investment, three outcomes:
The company fails. Your shares are worth £0. You claimed £5,000 income tax relief up front, and can claim loss relief on the £5,000 at risk — £2,250 at the 45% rate. Total loss: £2,750 of your £10,000.
The company breaks even. You sell your shares for £10,000 after three years, having claimed £5,000 in income tax relief. Combined you've received £15,000 back.
The company doubles. Your shares are worth £20,000. Because you claimed £5,000 income tax relief and held the shares for a minimum of three years, there is no CGT on the gain. You've received a total of £25,000 back from your £10,000 investment.
A £100,000 investment alongside a £24,000 CGT bill:
Shares fall to zero. Loss relief on the £50,000 at risk adds £22,500 at the 45% rate. Total relief: £84,500. Your effective loss on £100,000 is £15,500 — 15.5%.
Shares stay flat. You claim £50,000 income tax relief plus £12,000 CGT reinvestment relief (half your £24,000 bill). You've recovered £62,000 — 62% of your investment — before any growth.
Shares grow 50%. Because you claimed income tax relief, the £50,000 gain on your shares is CGT-free after three years. With £62,000 of relief on top, your effective gain is 112%.
To qualify, a company must:
have been trading for less than 3 years
have fewer than 25 full-time equivalent employees
have gross assets of no more than £350,000 before the investment
raise no more than £250,000 under SEIS in total
carry out a qualifying trade, and have received no prior EIS or VCT investment
Companies can apply to HMRC for SEIS Advance Assurance before raising. Demand at the front of the funnel is at a record: HMRC received 4,085 SEIS advance assurance applications in 2025-26, up 24% year on year (HMRC, May 2026). Before investing directly, ask whether the company holds it.
Relief is for individuals only — not companies or trusts.
You cannot be "connected" to the company: paid employees, partners and directors are excluded (unpaid directors can still claim income tax relief).
You cannot hold a 30% or greater interest in the company or a subsidiary.
Shares must be new ordinary shares, non-redeemable, with no special rights, paid in full and in cash. The risk-to-capital condition applies to shares issued on or after 15 March 2018.
You can claim tax relief using the form on the SEIS3 certificate you receive after investing, or on your self-assessment tax return. You'll need to add details from the SEIS3 certificate, including the Unique Investor Reference, to your tax return to make your claim.
You'll receive the SEIS3 certificate from the investee company, or the SEIS fund manager, once HMRC has confirmed SEIS eligibility. This can take around 3–6 months to arrive after you invest.
If you invest through a fund, you'll receive one SEIS3 per portfolio company. Claims can be made up to five years after the 31 January following the tax year of the investment. Keep the forms — HMRC can ask for them after processing.
The main ways investors invest in SEIS-eligible companies are:
Direct investment — through angel networks, accelerators or equity crowdfunding platforms. You pick the companies and carry the concentration risk yourself.
Through an SEIS fund — a manager builds you a portfolio of SEIS-qualifying companies, spreading the risk across several ventures. Visit our open SEIS fund.
Because SEIS invests in companies at their earliest stages, these investments are considered riskier than those available through EIS or VCT. Because of this, the tax reliefs offered differ from those offered by schemes like the Enterprise Investment Scheme (EIS), which deals with companies at a slightly later stage.
EIS offers 30% income tax relief, rather than SEIS's 50%, although it has a much larger investment allowance (£1–2m, rather than £200,000). In place of the SEIS reinvestment relief, which reduces the tax paid on a capital gain reinvested in SEIS by 50%, EIS lets you defer the full amount of an existing gain until the point in time that the EIS investment is realised.
Venture Capital Trusts offer 20% income tax relief with tax-free dividends and a five-year hold. For the full comparison, see EIS vs SEIS compared or our Enterprise Investment Scheme guide.
Seed-stage returns are not evenly distributed — and SyndicateRoom's own research quantifies how uneven. Our analysis of every UK startup funding round from 2011 to 2021 found the market follows a power-law distribution with an alpha of 1.8: a small number of companies generate the large majority of returns. The practical consequence for SEIS investors is that breadth beats stock-picking — the probability of holding an outlier rises with portfolio size. The full method is in our whitepaper The science of startup investing: putting the power law to work.
That same research programme found the UK startup market grew by approximately 25% a year across the 2011–2021 window it analysed — before the post-2022 correction now visible in our filings data below. The long-run lesson holds either way: growth accrues to the market in aggregate, which individual pickers routinely miss and diversified portfolios are built to capture.
Context matters for 2026/27 too. SyndicateRoom's analysis of 28 quarters of Companies House share-allotment filings shows the sub-£50m UK fundraising segment raised £1.66bn across 1,403 fundraises in Q1 2026, the lowest opening quarter since 2020 — while HMRC's figures show SEIS at a record high. Capital is thinning overall but concentrating at the seed stage, where the reliefs are strongest. See what 28 quarters of UK filings tell us.
SyndicateRoom's current SEIS offering is the Carbon13 SEIS Fund — pre-seed climatetech companies built through Carbon13's venture builder, which since 2021 has invested £13 million across more than 90 climatetech startups.
On why the venture-builder model suits SEIS-stage risk, Carbon13 co-founder Dr Nicky Dee explains:
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