Search Legislation

Income Tax Act 2007

 Help about what version

What Version

  • Latest available (Revised)
  • Original (As enacted)
 Help about advanced features

Advanced Features

Changes to legislation:

There are currently no known outstanding effects for the Income Tax Act 2007, CHAPTER 1. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

[F1CHAPTER 1U.K.Introduction

Textual Amendments

F1Pt. 5A inserted (17.7.2012) (with effect in accordance with Sch. 6 para. 24(1) of the amending Act) by Finance Act 2012 (c. 14), Sch. 6 para. 1

SEIS reliefU.K.

257AMeaning of “SEIS relief” and commencementU.K.

(1)This Part provides for SEIS income tax relief (“SEIS relief”), that is, entitlement to tax reductions in respect of amounts subscribed by individuals for shares in companies carrying on new businesses.

(2)In this Part “SEIS” stands for the seed enterprise investment scheme.

[F2(3)This Part has effect in relation to shares issued on or after 6 April 2012 only.]

F3(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F2S. 257A(3) substituted (17.7.2014) by Finance Act 2014 (c. 26), s. 54(2)

F3S. 257A(4) omitted (17.7.2014) by virtue of Finance Act 2014 (c. 26), s. 54(3)

257AAEligibility for SEIS reliefU.K.

An individual (“the investor”) is eligible for SEIS relief in respect of an amount subscribed by the investor on the investor's own behalf for an issue of shares in a company (“the issuing company”) if—

[F4(za)the risk-to-capital condition is met (see section 257AAA),]

(a)the shares (“the relevant shares”) are issued to the investor,

(b)the investor is a qualifying investor in relation to the relevant shares (see Chapter 2),

(c)the general requirements (including requirements as to the purpose of the issue of shares and the use of money raised) are met in respect of the relevant shares (see Chapter 3), and

(d)the issuing company is a qualifying company in relation to the relevant shares (see Chapter 4).

Textual Amendments

[F5257AAARisk-to-capital conditionU.K.

(1)The risk-to-capital condition is met if, having regard to all the circumstances existing at the time of the issue of the shares, it would be reasonable to conclude that—

(a)the issuing company has objectives to grow and develop its trade in the long-term, and

(b)there is a significant risk that there will be a loss of capital of an amount greater than the net investment return.

(2)For the purposes of subsection (1)(b)—

(a)the risk is to be determined by reference to a loss of capital, and the net investment return, for the investors generally,

(b)the reference to a loss of capital is to a loss of some or all of the amounts subscribed for the shares by the investors, and

(c)the reference to the net investment return is to the net investment return to the investors (whether by way of income or capital growth) taking into account the value of SEIS relief.

(3)For the purposes of subsection (1) the circumstances to which regard may be had include—

(a)the extent to which the company's objectives include increasing the number of its employees or the turnover of its trade,

(b)the nature of the company's sources of income, including the extent to which there is a significant risk of the company not receiving some or all of the income,

(c)the extent to which the company has or is likely to have assets, or is or could become a party to arrangements for acquiring assets, that could be used to secure financing from any person,

(d)the extent to which the activities of the company are sub-contracted to persons who are not connected with it,

(e)the nature of the company's ownership structure or management structure, including the extent to which others participate in or devise the structure,

(f)how any opportunity for investment in the company is marketed, and

(g)the extent to which arrangements are in place under which opportunities for investments in the company are or may be marketed with, or otherwise associated with, opportunities for investments in other companies or entities.

(4)If the issuing company is a parent company—

(a)any reference in this section to the company's trade is to what would be the trade of the group if the activities of the group companies taken together were regarded as one trade, and

(b)any reference in subsection (3)(a) to (e) to the company is to any group company.]

Textual Amendments

257ABForm and amount of SEIS reliefU.K.

(1)If an individual—

(a)is eligible for SEIS relief in respect of any amount subscribed for shares, and

(b)makes a claim in respect of all or some of the shares included in the issue,

the individual is entitled to a tax reduction for the tax year in which the shares were issued (“the current tax year”).

This is subject to the provisions of this Part.

(2)The amount of the tax reduction to which the individual is entitled is the amount equal to tax at the SEIS rate for the current tax year on—

(a)the amount or, as the case may be, the sum of the amounts subscribed for shares issued in that year in respect of which the individual is eligible for and claims SEIS relief, or

(b)if less, [F6£200,000].

(3)In this Part “the SEIS rate” means 50%.

(4)The tax reduction is given effect at Step 6 of the calculation in section 23.

(5)If in the case of any issue of shares—

(a)which are issued in the current tax year, and

(b)in respect of the amount subscribed for which the individual is eligible for SEIS relief,

the individual so claims, subsections (1) and (2) apply as if, in respect of such part of that issue as may be specified in the claim, the shares had been issued in the preceding tax year, and the individual's liability to tax for both tax years is determined accordingly.

Textual Amendments

F6Sum in s. 257AB(2)(b) substituted (6.4.2023 in relation to shares issued on or after that date) by Finance Act 2023 (c. 30), s. 15(2)(7)

MiscellaneousU.K.

257ACMeaning of “period A” and “period B”U.K.

(1)This section applies for the purposes of this Part in relation to any shares issued by a company.

(2)Period A” means the period—

(a)beginning with the incorporation of the company, and

(b)ending immediately before the termination date relating to the shares.

(3)Period B” means the period—

(a)beginning with the issue of the shares, and

(b)ending immediately before the termination date relating to the shares.

(4)In this section “the termination date”, in relation to the shares, means the third anniversary of the date on which the shares are issued.

257ADOverview of other Chapters of PartU.K.

In this Part—

(a)Chapter 5 provides for the attribution of SEIS relief to shares and the making of claims for such relief,

(b)Chapter 6 provides for SEIS relief to be withdrawn or reduced in the circumstances mentioned in that Chapter,

(c)Chapter 7 makes provision with respect to the procedure for the withdrawal or reduction of SEIS relief, and

(d)Chapter 8 contains supplementary and general provisions.

257AE CGT reliefs relating to SEISU.K.

(1)Section 150E of TCGA 1992 makes provision about gains or losses on the disposal of shares to which SEIS relief is attributable.

(2)Schedule 5BB to that Act provides relief in respect of the re-investment under SEIS of the proceeds of assets disposed of in circumstances where there would otherwise be a chargeable gain.]

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources