Income Tax Act 2007 section 257JA

Form and amount of relief

Section 257JA sets out how seed enterprise investment scheme (SEIS) income tax relief is calculated, the maximum investment eligible for relief, the rate of relief, and the option to carry back relief to the preceding tax year.

• An individual who is eligible for SI relief and makes a claim receives an income tax reduction for the tax year in which the investment was made, based on all or part of the amount invested
• The tax reduction equals 30% (the SI rate) of the amount invested in the year for which relief is claimed, subject to a maximum investment of £1 million per year
• An individual may elect to treat some or all of an investment as if it had been made in the tax year preceding the year in which the investment actually took place, with tax liabilities for both years adjusted accordingly
• The tax reduction is applied at Step 6 of the income tax calculation under section 23, meaning it reduces the individual's tax liability after other reliefs and allowances have been taken into account