If you have invested in a company eligible for Seed Enterprise Investment Scheme (SEIS) relief – what now? How do you claim SEIS income tax relief after investing? With 2017-18 self-assessment returns due shortly, many are looking to understand how to claim their SEIS tax relief. We’ll tell you how!
What you need
In order to complete your 2017-18 self-assessment return to claim your SEIS income tax relief, two key documents are required:
1. SEIS 3 Certificate
After the company has been trading for 4 months or 70% of SEIS monies have been spent, a SEIS Application is submitted to HMRC for SEIS 3 Certificates. HMRC issue the SEIS 3 Certificates directly to the Company (or an agent managing the process on their behalf) who then complete the forms and send onto each of their shareholders.
The SEIS 3 Certificate has a number of important details, including the company name, the amount invested, and details of the HMRC office that issued the SEIS 3 Certificate. These are the details that are required to complete your self-assessment and claim your SEIS tax reliefs. As SEIS shares need to be held for at least 3 years to maintain eligibility, it is important to note the certificate also notes the date when the three year qualifying period for the shareholding ends.
2. Share Certificate
The first document you should receive from your investee company is your Share Certificate which is issued after the company’s share issue date. This document has some similar details to your SEIS 3 such as company name, amount invested, and the number of shares you have been allocated. This is a valuable document and should be kept somewhere safe and readily available if requested i.e. on an exit of the business.
Both of these documents are issued in hard copy so do ensure your correct address is on file with the Company or the agent handling your EIS investment.
Completing the Tax Return
Once you have both of these documents in your possession, you will be ready to complete your self-assessment tax return. In box 10 of the ‘Other Tax Reliefs’ section (page Ai2), you will enter the total amount of the subscriptions on which you are now claiming SEIS tax relief.
In box 21 of the ‘Any other information’ section on page Ai4, you have a text box in which to enter additional details. Here is where you can enter details from your SEIS 3 form including the name of the company, date of share issue, and details of the issuing HMRC office.
NB – HMRC may request to see a copy of your SEIS 3 Certificate so it is best to keep is safe.
If you are not in possession of your share certificate of SEIS 3 Certificate when you are ready to complete your self-assessment return, it is helpful to recall the SEIS 3 Certificates are only issued once the company has been trading for 4 months or 70% of SEIS monies have been spent. If this requirement has passed and you still not have your SEIS 3, contact the Agent or Company through whom you invested as they should be able to help you located your SEIS 3 Certificate, or explain why it has not yet been issued.
Guide to claim SEIS Tax Relief
For additional information on SEIS and how to claim your SEIS reliefs, including carry-back, our Guide to Claiming Income Tax Relief on SEIS investments may be of use. With a short introduction of the SEIS reliefs available, this short guide provides instructions on how to claim your SEIS income tax relief on your 2017-18 self-assessment return, or how to carry-back SEIS tax relief to 2016-17.