Budget 2014 – Making the SEIS and capital gains tax reinvestment relief permanent

SEIS relief was introduced on 6 April 2012. It provides income tax relief for investors of 50% of the amount invested, up to a maximum investment of £100,000, as well as exemption from capital gains tax on a future disposal of the shares (provided certain conditions are met throughout the relevant period).

The provisions are similar to EIS relief, and are contained in Part 5A, ITA 2007. SEIS income tax and disposal relief are currently available for investments made before 6 April 2017.

A capital gains tax exemption is also available for 2013/14 where chargeable gains are reinvested in SEIS shares. This exemption is limited to 50% of the gain reinvested up to a maximum investment of £100,000. For 2012/13 the exemption was available for 100% of chargeable gains reinvested up to a maximum investment of £100,000.

Legislation will be introduced in Finance Bill 2014 to provide for SEIS to become permanent and the current reinvestment exemption will continue.

SEIS relief has become a permanent relief for investors alongside EIS relief.