HMRC Clarifies Start Up Re-Investment Relief

HMRC has recently clarified the position on the Capital Gains Tax (CGT) re-investment relief available under the Seed Enterprise Investment Scheme (SEIS).

SEIS provides investors with 50% income tax relief on their investment in qualifying companies, to a maximum of £100,000 per tax year.In addition, HMRC and HM Treasury had previously indicated that, to ‘kick-start’ this relief, CGT re-investment relief (a pound for pound exemption on chargeable gains re-invested this year) would be available for the 2012-13 tax year only.

However, HMRC has now clarified that investors can claim to treat SEIS investments made in the 2013-14 tax year, as if made in the 2012-13 tax year.This means that, practically speaking, the one year CGT relief can be extended by a further year, provided that the individual concerned has income tax to relieve and chargeable gains to exempt in 2012-13.

Clearly, the ability to claim investment reliefs in the 2012-13 tax year on investments made in the 2013-14 tax year presents investors with tax planning opportunities. In addition, it provides time for investors to consider which companies to invest in.  Further information on SEIS can be found at