Income Tax Act 2007 section 257FL

Cases where maximum SEIS relief not obtained

Section 257FL deals with how the withdrawal of SEIS relief is adjusted when an investor has not obtained the full amount of SEIS income tax relief on their shares.

• Where the actual income tax reduction (A) is less than the tax at the SEIS rate on the amount claimed (B), the value received figure used in calculating any withdrawal is scaled down proportionately.
• The scaling fraction applied to the received value is A divided by B, reducing the amount subject to clawback in line with the relief actually obtained.
• If SEIS relief attributable to relevant shares was reduced before it was obtained (for example, due to insufficient tax liability), the figure for A is treated as what it would have been without that prior reduction.
• This restoration of A does not apply where the reduction arose from the attribution of SEIS relief following a corresponding issue of bonus shares under section 257E(4).