Income Tax Act 2007 section 173B

The spending of money raised by SEIS investment requirement

Section 173B requires that money raised through the Seed Enterprise Investment Scheme (SEIS) must be spent for a qualifying purpose within a specified timeframe, ensuring funds are deployed appropriately in the qualifying business activity.

• Money raised through SEIS share issues must be employed for the purposes of the qualifying business activity within a set period.
• The requirement applies a cap on total relevant investments received by the company and its subsidiaries over a three-year period following the date the relevant shares are issued.
• The provision prevents an investee company from circumventing the total investment limit by using SEIS funds to acquire another company or trade that has itself already benefited from earlier relevant investments.
• Where a newly acquired company or trade has received prior relevant investments which, combined with the investing company's own relevant investments at the date of issue, would breach the investment limit, the SEIS relief may be denied.