SolvedVCM40050 | Seed Enterprise Investment Scheme (SEIS): SEIS disposal relief: Income Tax relief restricted: example
From HM Revenue & Customs · Venture Capital Schemes Manual
TCGA92/S150E (4) and (5)
December 2023 an investor subscribes £250,000 for 100,000 shares in a SEIS company.
Maximum Income Tax relief of £100,000 is given in the tax year 2023-24.
January 2028 all the shares are sold for £370,000.
The chargeable gain before any exemption is calculated:
| Description | Amount |
|---|---|
| Disposal proceeds | £370,000 |
| Less cost | £250,000 |
| Chargeable gain | £120,000 |
The TCGA92/S150E(5) formula is:
R = Amount of Income Tax Relief = £100,000
T Subscription x SEIS rate (50%) £125,000
Only a part of the gain is treated as CGT-exempt. The exemption is restricted to:
£120,000 x 100,000/125,000 = £96,000
The chargeable gain becomes £120,000 - £96,000 = £24,000.