Income Tax Act 2007 section 257GC

Cases where assessments not to be made

Section 257GC sets out the circumstances in which HMRC may not make an assessment to withdraw or reduce Seed Enterprise Investment Scheme (SEIS) income tax relief on shares issued to an individual.

• No assessment to withdraw or reduce SEIS relief may be made because of any event occurring after the death of the individual who holds the shares.
• Where an individual has disposed of all their SEIS shares in the issuing company (including shares where the qualifying period has not yet ended), subsequent events generally cannot trigger a withdrawal or reduction of relief.
• However, this protection is lost if, at the time of the subsequent event, the individual holds a substantial interest in the company, or is an employee or director of the issuing company.
• These rules protect former investors from having their SEIS relief clawed back after they have fully exited their investment, provided they have no ongoing connection with the company.