Income Tax Act 2007 section 257BE

The no tax avoidance requirement

Section 257BE requires that an investor's subscription for shares under the Seed Enterprise Investment Scheme must be motivated by genuine commercial reasons and must not form part of a tax avoidance arrangement.

• Shares must be subscribed for by the investor for genuine commercial reasons
• The subscription must not be part of any scheme or arrangement aimed at avoiding tax
• Tax avoidance need only be one of the main purposes of the arrangement for the requirement to be breached
• If this requirement is not met, the SEIS income tax relief will not be available on those shares