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Investor Guide

SEIS - Seed Enterprise Investment Scheme

Headlined by up to 50% income tax relief, the Seed Enterprise Investment Scheme allows  investors to access some of the UK's most generous tax advantages available when investing in high-growth, impact driven early stage startups.

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What is the SEIS?

A World-Leading Scheme for Startup Investing

Introduced in 2012 as a means of connecting especially early stage startups with private investment, since then the Seed Enterprise Investment Scheme (SEIS) has raised over £1.5 billion of investment for more than 15,000 UK startups, in part due to the particularly generous tax reliefs it offers investors.

Labelled as a "world leading investment scheme" by Chancellor Rishi Sunak, the SEIS has amassed praise from a host of key financial figures over the last decade, not only for its ability to streamline the purchase of shares into high-growth startups, but for the range of attractive tax advantages it offers private investors (from 50% income tax relief to capital gains tax exemption).

Boasting higher levels of tax relief than its sibling scheme (the Enterprise Investment Scheme), the SEIS's generous tax breaks seek to minimise the risk and maximise the returns associated with investing in startups, whilst promoting an opportunity for impact investing through innovative young enterprise.

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01 | Income Tax Relief

Up to 50% Income Tax Relief

With SEIS investments, investors can claim 50% income tax relief up to a maximum of £100,000 a year (equating to a maximum potential saving of £50,000 in tax  per annum) should shares be held for at least three years.

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02 | Tax-Free Growth

Capital Gains Tax Exemption

Under the condition that they are held for at least three years, SEIS capital gains tax relief means that any gain in the value of SEIS shares is CGT and income tax-free, facilitating  the opportunity for considerable tax-free growth.

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03 | CGT Reinvestment

Capital Gains Tax Reinvestment Relief

SEIS reinvestment relief allows an investor who has disposed of a chargeable asset (that would normally be liable to capital gains tax) to treat up to 50% of the gain as CGT exempt should they reinvest it into SEIS qualifying shares.

London SME offices

04 | IHT Relief

Shares Passed on Inheritance Tax-Free

The SEIS's full inheritance tax relief allows investors to pass down SEIS shares exempt of the usual 40% IHT due on estates over the value of £325,000 (providing the shares have been held for a minimum of two years).

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05 | Loss Relief

Risk Minimisation with Loss Relief

Should a loss be realised on an SEIS investment (a potential outcome to be considered when investing in higher risk startups), SEIS loss relief allows investors to offset the value of their loss against their income tax bill or CGT bill.

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06 | Positive Impact

An Inroad to Impact Investing

Providing investors with the opportunity to invest into some of the UK's most cause-driven, transformative startups tax efficiently, SEIS investments offer an accessible inroad into impact investing.

Minimise Risk. Maximise Returns.

The GCV Portfolio

Our Most Recent SEIS-eligible Opportunities

Having hosted a number of SEIS-eligible investment rounds for a range of portfolio companies residing in a variety of industries, at GCV we possess a wealth of experience in originating and facilitating growth-focused, impact-driven SEIS investment opportunities.

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Round 1
Completed

Hive.Hr

Sector: HR Tech
Target Sought: £ 150,000
Funds Raised: £ 303,000
Round: Round 1
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about Hive.Hr
Round 1
Completed

Intelligence Fusion

Sector: SaaS
Target Sought: £ 400,000
Funds Raised: £ 556,800
Round: Round 1
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about Intelligence Fusion
Round 1
Completed

n-gage.io

Sector: SaaS
Target Sought: £ 150,000
Funds Raised: £ 170,000
Round: Round 1
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about n-gage.io
Round 1
Completed

Business Finance Market (trading as Finance Nation)

Sector: Fintech & Banking
Target Sought: £ 150,000
Funds Raised: £ 225,000
Round: Round 1
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about Business Finance Market (trading as Finance Nation)
Round 1
Completed

Growth Capital Ventures

Sector: Fintech
Target Sought: £ 500,000
Funds Raised: £ 561,000
Round: Round 1
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about Growth Capital Ventures
Round 2
Completed

Growth Capital Ventures

Sector: Fintech
Target Sought: £ 1,000,000
Funds Raised: £ 1,290,410
Round: Round 2
Investment Type: Equity
Tax Schemes: EIS, SEIS
Learn More about Growth Capital Ventures

Key Facts

Benefits and Risks of SEIS Investments

Whilst the Seed Enterprise Investment Scheme poses a wealth of generous advantages for experienced investors keen to benefit from the UK's burgeoning startup landscape, before making any investment via the SEIS, it's important that the scheme's limits and risks are also considered in a balanced manner.

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Maximising
Returns

Combined with the strict SEIS eligibility criteria that startups must meet to ensure they are in a positive position for growth, the addition of considerable tax benefits (from 50% income tax relief to reinvestment relief) can further enhance the potential for positive returns.

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Reducing
Risk

Whilst investing in UK startups offers the potential for more lucrative growth when compared with mature equity alternatives, this higher growth breeds considerable risks. The SEIS balances these risks with a host of generous tax reliefs, superior even to its sibling scheme, the EIS.

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Portfolio
Diversification

Though residing on the higher end of the risk spectrum, the ability of SEIS opportunities to exist across a broad range of industries and geographies can make them (among other things)a powerful tool for achieving portfolio diversification, and further spreading risk.

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Lowering
Tax Liablities

Whether it's through reinvestment relief that can negate 50% of the tax due from the sale of any chargeable asset, or inheritance tax relief that can cut the value taxed from your estate, investing in UK startups via the SEIS offers the potential to reduce tax bills considerably.

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Investing up To
£100,000

Investors can invest up to £100,000 in SEIS shares per tax year, spread across as many or as few companies desired. Though this fulfills one of the key draws of startup investing (in offering potential for significant capital growth), SEIS investments are limited to qualifying trades.

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Fuelling Startup
Innovation

Tailored specifically to early stage startups, SEIS rules ensure investment fuels growth at arguably the most crucial stage of an SME's lifecycle by imposing strict limits such as maximum gross assets of £200,000 and no more than 25 employees.  

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Alternative
Advantages

As an alternative investment, the SEIS benefits from advantages including high resistance to stock market fluctuations and the ability to generate significant passive growth, though often requires a longer payback period than traditional asset classes such as stocks and shares.

Portfolio Diversification.
Superior Returns.

Free Investor Guide

Seed Enterprise Investment Scheme

For investors interested in supporting growth-focused, impact-driven startups, the SEIS is one of the most generous tax incentives to aid in maximising returns and minimising risk.
This free guide gives an in-depth insight into how the SEIS can enable you to:
    • Access 50% income tax relief
    • Claim 50% capital gains reinvestment relief
    • Pay zero capital gains tax when selling SEIS shares
    • Pass on your investment free of inheritance tax
    • Claim loss relief should an unexpected event arise
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Seed Enterprise Investment Scheme
FAQs

Key Questions Relating to the SEIS

Should you have queries surrounding the SEIS, EIS or tax efficient investing space, we have compiled a list of frequently asked questions to help answer them.

  • The SEIS (Seed Enterprise Investment Scheme) is a government backed investment scheme introduced in the UK in 2012 to connect innovative early stage startups with private investors. Having raised over £1.5 billion for more than 15,000 startups in that time, the SEIS's shared success can be in part attributed to the range of generous tax reliefs it offers investors.

  • The two primary ways of investing with the SEIS are either by investing in a single SEIS-eligible portfolio company (often through a co-investment platform), or via an SEIS fund that groups multiple companies together. 

  • The primary difference between the EIS and SEIS is that the SEIS is targeted at especially early stage startups, and so its eligibility criteria is more limited and investor tax reliefs more generous (in order to offset the added risk). 

  • SEIS investments are for typically experienced or wealthy investors, as part of a diversified portfolio.

    They could be particularly attractive to investors with a large income tax bill who are looking for growth-focused opportunities. 

    SEIS could also be appealing to investors with capital gains tax liabilities.

  • SEIS income tax relief allows investors to claim up to 50% income tax relief on SEIS investments up to £100,000 per tax year. This tax relief alone could amount to maximum potential investor saving of £50,000 per annum. 

  • Normally SEIS tax reliefs are claimed upon completion of your annual tax return, in which you'll be asked for details found on the SEIS3 certificate that was issued following your investment. Following a number of simple steps this process can amount to considerable deductions off your tax bill.

  • Should they be held for at least three years, any gain realised on the value of SEIS shares is capital gains tax and income tax free. 

  • Carry back relief allows investors to treat their EIS or SEIS eligible shares as though they were gained in the previous tax year, and therefore effectively claim relief on them for that year. This can be helpful should your tax reliefs for the current year exceed your tax paid.

  • The maximum investors can pledge in SEIS investments per tax year is £100,000. The minimum investment amount, though, will vary from provider-to-provider. 

  • The SEIS's multi-stakeholder benefits mean that not only can investors gain from the high target growth, impact driven focus and portfolio diversifying advantages of the scheme, but that the UK's most promising young startups can also benefit from the vital growth capital that may have been previously inaccessible to them due to competition from larger firms. 

Driving Growth.
Creating Value.
Delivering Impact.

Backed by

Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.