SEIS Reinvestment Relief

Gary Green
Gary Green
February 26, 2020

In this article, find out how an SEIS investment can save you money on your Capital Gains Tax via Reinvestment Relief.

The Seed Enterprise Investment Scheme (SEIS) allows you to invest money in a young business and claim tax relief at the same time. This tax relief can come via Income Tax, Capital Gains Tax and Reinvestment.

Today we’re going to talk about Reinvestment Relief.

What Is Reinvestment Relief?

There are two ways that SEIS can save you money on Capital Gains tax. “Disposal Relief” is what most people think of when they talk about CGT. This is tax relief when you sell your shares and realise a profit.

To qualify for Reinvestment Relief, you sell your shares (at a profit) and then reinvest the proceeds in a company on which you get SEIS Income Tax Relief.

You can nominate up to half of your profits to be exempt from CGT. And you can get this relief even if you already get Income Tax relief on the shares.

What’s The Catch?

No catch really, other than a couple of restrictions in terms of the absolute amount you can claim.

You can’t claim more than half of the total amount you’re already claiming Income Tax relief on. And that Income tax figure is capped at £100,000 (at the time of writing). So you can’t claim more than £50,000 Reinvestment Relief.

You can, of course, claim less than the maximum amount.

The HMRC page on SEIS Tax Relief has all the details, including a handy worked example.

How Do I Claim?

If you’re planning to claim the tax relief as part of your self-assessment, you can use the SEIS3 claim form (you’ll have got this from the company when you bought the shares). Attach it to the Capital Gains summary form. As the HMRC page explains:

  • Put the 3-letter code ‘OTH’ in box 28 on page CG 2
  • Provide details of the claim in the ‘Any other information’ box, box 54, or in your computation
  • Enter in box 40 the total of all your gains made on the disposal of assets in the year to 5 April 2019 which are claimed to be exempt because of reinvestment into shares issued to you, or treated as issued to you, in that year by one or more SEIS companies
  • Enter the total of the amounts claimed to be exempt, not the full amount of the gains

If you’re planning to claim after you’ve sent your tax return, use the SEIS3 claim form.

Key Business Consultants was founded as an SEIS specialist accounting firm. So if you’d like to get some advice from a team of chartered accountants who are experts in this area, please get in touch.

Interested in our services?
Fill in your details and a member of our experienced team will be in touch shortly to discuss your needs.
Contact Form Demo (#1)
We adhere to strict GDPR rules and do not reveal or sell your data to any third-parties. For more, please read our Privacy Policy.
Latest Insights
October 23, 2023
PAYE Investigations

Dive into the world of PAYE investigations. Uncover the facts, implications, and insights in this informative blog

September 29, 2023
London-based accountancy business acquired by Key Business Consultants

Exciting Merger Alert: London's Reed Taylor Benedict & Benedict Leff Accountants Acquired by Key Business Consultants.

September 18, 2023
Tax Tribunals – An Overview

Dive into the realm of Tax Tribunals: A comprehensive overview shedding light on this crucial aspect of taxation.

September 2, 2023
What Is A COP8?

Learn about COP8, a tax-related Code of Practice issued by HMRC for suspected tax avoidance cases. Discover when COP8s are used and the penalties associated with them.

August 20, 2023
HMRC Compliance Checks

Navigate the complexities of HMRC compliance checks confidently. Our comprehensive guide covers everything you need to know about handling tax inspections and more.

August 6, 2023
Tax Evasion and Tax Fraud

Untangling the complexities of tax evasion and fraud. Delve into our comprehensive guide to understand the differences, consequences, and preventive measures.

June 18, 2023
Which Jobs In The UK Have The Best Salary Growth Potential?

Explore the top UK jobs with the highest salary growth potential. Uncover promising career paths and industries that offer substantial earning potential.

May 23, 2023
How To File Dormant Accounts Through Companies House

Learn the step-by-step process of filing dormant accounts through Companies House with our comprehensive guide.

May 19, 2023
Customs Declaration Service (CDS) and VAT

Discover how the Customs Declaration Service (CDS) and VAT intertwine in this insightful blog article.

View Our latest insights »
Get the latest UK tax & business news and guidance delivered straight to your inbox
Newsletter Form (#2)
We care about the protection of your data. No spam. Unsubscribe anytime.
Copyright © 2022 Key Business Consultants LLP. Reg: E&W OC389322
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram