EIS & SEIS rules in 2026: the numbers that apply now, and the April inheritance-tax change most guides get wrong

EIS: 30% income-tax relief. Up to £1,000,000 invested per tax year, extended to £2,000,000 where everything above £1m is in knowledge-intensive companies. Minimum holding: three years.

SEIS: 50% income-tax relief. Up to £200,000 per tax year. Minimum holding: three years.

Both: relief is claimed with the EIS3/SEIS3 certificate, and the claim window closes five years after the 31 January following the tax year of investment.

Exit after three years with relief claimed: no capital gains tax on the shares. Failure: loss relief on the at-risk portion at your marginal income-tax rate.

Run your own numbers, including the failure case and the exit case side by side, in our EIS & SEIS calculator.

Two different reliefs share the "CGT" label and behave nothing alike.

EIS deferral relief postpones tax. Reinvest a capital gain into EIS shares and the CGT bill is deferred until the EIS shares are disposed of. The gain must have arisen no more than 36 months before, or arise no more than 12 months after, the EIS investment. The tax comes back when you exit; deferral is a loan, not a forgiveness.

SEIS reinvestment relief cancels tax. Reinvest a gain into SEIS shares in the same tax year and half of the reinvested gain is exempt from CGT permanently.

A note on names, because the search data says people mix them up: there is no "SEIS CGT deferral". Deferral is an EIS-only mechanism; the SEIS equivalent is reinvestment relief, and it is better: it cancels half the gain outright instead of postponing the bill.

Until 5 April 2026, shares in unquoted trading companies (which includes typical EIS and SEIS portfolio companies) qualify for 100% Business Relief from inheritance tax once held for two years, with no upper limit.

From 6 April 2026, the unlimited version ends. 100% relief applies only up to a per-estate allowance for combined Business and Agricultural Relief, announced at £1,000,000 and revised to £2,500,000 in the December 2025 update, with relief at 50% on qualifying value above the allowance. Above the allowance, that works out at an effective inheritance-tax rate of up to 20% on assets that would previously have passed free of the tax.

The error to watch for: several prominent guides state that EIS shares are unaffected by the cap. The official record says otherwise: the allowance regime applies to unquoted shares generally, and EIS-qualifying shares are unquoted shares. For estates with large EIS portfolios, April 2026 is a real planning boundary, and the two-year holding clock makes the timing arithmetic worth doing now rather than later.

No lifetime cap on EIS/SEIS income-tax relief. The caps are per tax year.

Carry-back: both schemes still allow treating an investment as made in the previous tax year, if that year's cap has room.

Advance assurance remains the practical gate: most companies raising under the schemes obtain HMRC's advance assurance first, and most sophisticated investors ask to see it.

The levers and the current official guidance (HMRC helpsheets HS341 and HS393, the Business Relief guidance, and the Commons Library briefing on the 2026 reform) sit with links at the foot of the calculator page. Figures stated here reflect the record as at August 2026. Information, not tax advice; confirm your position with your adviser.