SEIS and EIS for Expats: Can Non-Residents Claim the Relief?

SEIS and EIS are UK government schemes that reward individuals for investing in small, higher-risk trading companies by offering a package of tax reliefs. SEIS targets the very earliest-stage companies, EIS slightly larger ones, and both sit alongside the strict company-side qualifying conditions that the business itself must meet.

The headline is income tax relief. Under EIS you can claim relief at 30% of the amount you subscribe for shares, on up to £1 million of investment in a tax year. That ceiling rises to £2 million provided any amount above £1 million is invested in knowledge-intensive companies, which are research and development heavy businesses that meet HMRC's definition. Under SEIS the rate is more generous at 50%, but the annual ceiling is lower, at £200,000 of investment per tax year. You can also elect to carry some or all of an investment back to the previous tax year and claim the relief there, within that year's limit.

Both schemes then layer on capital gains advantages. If you hold the shares for at least three years and your income tax relief was given and not withdrawn, any gain when you eventually sell can be free of Capital Gains Tax. EIS adds CGT deferral relief, which lets you postpone tax on a separate gain by reinvesting it into EIS shares. SEIS instead offers reinvestment relief, which can make up to 50% of a reinvested gain exempt, with the relief itself capped at £100,000. There is also loss relief if the company fails. The reliefs below summarise the package.

• EIS income tax relief: 30% of the subscription, on up to £1 million a year, or up to £2 million where the excess goes into knowledge-intensive companies.
• SEIS income tax relief: 50% of the subscription, on up to £200,000 a year.
• CGT disposal exemption (both schemes): no CGT on a gain on the shares if held at least three years and income tax relief was received and not withdrawn.
• EIS deferral relief: defer an existing chargeable gain by reinvesting it in EIS shares, with no upper limit on the amount reinvested.
• SEIS reinvestment relief: 50% of a reinvested gain exempt, with the relief capped at a maximum of £100,000.
• Loss relief: relief for a loss on the shares, after taking account of income tax relief already given.

Every one of these reliefs comes with conditions, and a minimum three-year holding period runs through most of them. The figures here are correct for the 2026/27 tax year. The Autumn 2025 Budget widened the company-side limits and cut Venture Capital Trust relief, but the EIS and SEIS investor relief rates and annual limits are unchanged. The company must still hold its qualifying status, and HMRC can withdraw relief if conditions are breached.

In practice, usually not, because the income tax relief can only be set against a UK income tax liability, and most non-residents do not have one large enough to use it. The relief works by reducing the income tax you owe in the UK. HMRC's own guidance is blunt on the point: you can only claim relief against the amount of Income Tax you have to pay in the UK, and you cannot carry forward unused income tax relief to a future tax year.

For an expat who has left the UK and has little or no UK-source income, this is the heart of the problem. You might invest £100,000 into an EIS company expecting £30,000 off your tax bill, but if you have no UK income tax to pay, there is no liability for the 30% to reduce, and the relief is simply lost. It is not refunded as cash, and it does not roll forward to a year when you might have a UK liability again.

There is no separate rule that you must be UK resident to claim EIS or SEIS income tax relief in the first place. The old ordinary residence condition was removed, so a non-resident who still has a UK income tax liability, for example from UK rental profits, certain UK earnings, or other UK-taxable income, can in principle set the relief against that liability. The constraint is arithmetic rather than a residence label: you need a UK income tax bill for the relief to bite, and the size of that bill caps what you can actually use.

It is worth being clear about one thing the income tax relief does not do. Simply becoming non-resident after you have invested does not, by itself, claw back the 30% or 50% income tax relief you have already had. The residence trap that does exist sits with EIS deferral relief, not with the income tax relief, and we cover it in its own section below. So the income tax relief question for an expat is really about whether you have a UK income tax bill to use it against, while the residence-driven clawback is a separate issue tied to deferred gains.

The capital gains reliefs only help you if you are within the UK capital gains net, which for most individuals means being UK resident when you dispose of the shares. The CGT disposal exemption removes UK tax on a gain on EIS or SEIS shares where you held them for at least three years and received income tax relief that was not later withdrawn. That is valuable, but only if the gain would otherwise have been taxable in the UK.

For a non-resident, a gain on ordinary company shares is generally outside UK CGT anyway. So the headline that EIS and SEIS gains can be tax-free is, for many expats, solving a problem they do not have on the UK side. The more important question is how the gain is treated where you are tax resident. A jurisdiction that taxes your worldwide gains will usually not recognise the UK EIS or SEIS exemption, so a sale that is UK tax-free can still be fully taxable abroad. This is exactly the kind of mismatch that needs checking against the rules of your country of residence, not just the UK ones.

There is also a link between the income tax relief and the CGT exemption that catches some people who move abroad. The CGT disposal exemption requires income tax relief to have been received and not withdrawn. If your income tax relief is reduced or withdrawn for some other reason, for example because you disposed of the shares too soon or the company lost its qualifying status, the platform the exemption is built on goes with it. Holding the shares for the full three years, and keeping the company within the rules, protects both reliefs at once.

EIS deferral relief is the one relief that does not depend on having a UK income tax liability, which makes it the most relevant tool for some expats, but it carries its own residence trap. Deferral relief lets you postpone a chargeable gain on another asset by reinvesting an amount at least equal to that gain into EIS shares. There is no upper limit on the amount you can defer. The gain is not cancelled; it is held over until a later event brings it back into charge, most commonly when you dispose of the EIS shares.

Becoming non-resident is one of those events. A deferred gain is revived, meaning brought back into charge, if you cease to be UK resident within three years of the shares being issued. There is a narrow exception: the gain is not revived if you take up employment outside the UK and become UK resident again within three years, provided you have not disposed of any of the shares in the meantime. Outside that exception, an expat who defers a gain and then emigrates inside the three-year window can find the original gain crystallising on departure, which is the opposite of what they were trying to achieve.

Even beyond that three-year point, the temporary non-residence rules can apply. Broadly, if you were UK resident for at least four of the seven tax years before you left, leave the UK for a period of five years or less, and realise gains or have deferred gains revived while you are away, those gains can be brought into charge in the year you return to UK residence. The detail of how this applies to a particular gain depends on your dates and your residence status under the Statutory Residence Test, and it is one of the areas where a small difference in timing changes the result substantially. Anyone planning a disposal or a deferral around a move should model it before acting, not after.

The single most useful step is to map your UK residence position before you invest, because every part of the SEIS and EIS package turns on it. Whether you are arriving, leaving, or a long-term non-resident dipping back into UK income changes which reliefs are worth anything to you. The points below are the recurring ones we see.

• If you have no UK income tax liability, the EIS and SEIS income tax relief has nothing to bite on, and you cannot carry it forward to a year when you do; treat it as wasted rather than deferred.
• If you have used EIS deferral relief and plan to move abroad, check whether you will still be resident three years after the shares are issued, because going non-resident inside that window can revive the deferred gain unless you go abroad to work and return within three years still holding the shares.
• If you are returning to the UK, look at the temporary non-residence rules before realising gains or selling EIS shares while still abroad, as gains can be pulled into the year of return.
• If you are tax resident in another country, confirm how that country treats a UK EIS or SEIS gain, because the UK exemption rarely carries across and a UK tax-free sale can be taxable where you live.
• Keep your EIS3 and SEIS3 certificates and the dates of issue and disposal, since the three-year clock and the residence conditions all run from the issue date.
• Take advice before committing if your residence status is changing, as the schemes were built around settled UK taxpayers and the edges are where expats lose relief.

None of this means SEIS and EIS are off limits for internationally mobile investors. It means the value of each relief has to be tested against your actual residence facts rather than assumed. Sorting out precisely that interaction, between UK schemes and a cross-border life, is the kind of fixed-fee work this practice does day to day, and it is far cheaper to get right before the investment than to unwind afterwards.