Question 1

What is the difference between EIS and SEIS?

Accepted Answer

SEIS (Seed Enterprise Investment Scheme) offers 50% Income Tax relief on investments up to £200,000 per year in very early-stage companies. EIS (Enterprise Investment Scheme) offers 30% relief on up to £1,000,000 per year (or £2,000,000 in knowledge-intensive companies). Both also offer CGT relief and loss relief.

Question 2

How long do I need to hold EIS shares to keep the tax relief?

Accepted Answer

You must hold EIS shares for at least 3 years to keep the Income Tax relief. Selling before 3 years means HMRC will claw back the relief. SEIS shares also require a 3-year holding period.

Question 3

Can I carry back EIS relief to the previous tax year?

Accepted Answer

Yes. You can carry back EIS investments to the previous tax year, up to the unused annual investment limit of £1,000,000. This lets you reduce your prior year's tax bill if you have already filed. SEIS carry-back works the same way.

Question 4

Is EIS relief available against Capital Gains Tax as well?

Accepted Answer

Yes. If you reinvest a capital gain into EIS shares within 3 years, you can defer paying CGT on that gain until the EIS shares are sold. If the EIS investment is held for 3+ years, any gains on the EIS shares themselves are completely free of CGT.

Question 5

What happens if the EIS company fails?

Accepted Answer

If EIS shares become worthless, you can claim loss relief — offsetting the net loss (after the 30% tax relief) against income in the same or previous year, or against capital gains. This significantly reduces the downside risk of EIS investing.

EIS / SEIS Tax Relief Calculator 2026/27