See some Working Examples
1. Income Tax Relief
Relief is available at 50% of the cost of the shares and is given as a reduction in the tax liability provided there is sufficient liability to offset this against.
| Example | £ |
| Gross investment in shares |
100,000
|
| Less: income tax relief at 50% |
50,000
|
| Net cost of investment |
50,000
|
2. Capital Gains Tax Re-Investment Relief
Available if an asset disposal is made that would give rise to a capital gain and all or part of the gain is reinvested in qualifying shares, 50% of the reinvested amount will be exempt.
| Example | £ |
| Gross investment |
100,000
|
| Less: income tax relief at 50% |
50,000
|
| Cost of investment |
50,000
|
| Less: Capital gains tax re-investment relief* |
14,000
|
| Net cost of investment |
36,000
|
*Assumed capital gain of £100,000, which would have been taxable at 28%, reinvested.
3. Loss Relief
If the investment is unsuccessful and investor experiences zero return from the SEIS investment.
| Example | £ |
| Gross investment |
100,000
|
| Less: income tax relief at 50% |
50,000
|
| Cost of investment |
50,000
|
| Less: Capital gains tax re-investment relief* |
14,000
|
| Loss Relief on Cost of investment** |
22,500
|
| Net cost of investment | 13,500 |
*Assumed capital gain of £100,000, which would have been taxable at 28%, reinvested.
**Assuming Highest Rate Tax (45%)
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