How much of a £10,000 SEIS investment is actually at risk?

For an additional-rate taxpayer who claims both reliefs, about £2,750. SEIS income-tax relief returns £5,000 up front, and if the company fails, loss relief on the remaining £5,000 at 45% returns a further £2,250.

What is the real downside on a £10,000 EIS investment?

About £3,850 for a 45% taxpayer: £3,000 of income-tax relief up front, then loss relief of £3,150 on the remaining £7,000 if the company fails. That is 38.5p in the pound.

Is SEIS or EIS relief automatic?

No. You need the SEIS3 or EIS3 certificate from the company, you must claim within five years of the 31 January after the tax year of the investment, and selling within three years claws the relief back.

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SEIS & EIS: the real downside maths every UK angel should memorise

Tero team

The team behind Tero

2 min read

Updated 13 July 2026

SEIS & EISPortfolio strategy

Key takeaways

A £10,000 SEIS cheque risks £2,750. After 50% income-tax relief and loss relief at the additional rate, the true downside is 27.5p in the pound; EIS comes to 38.5p.
The relief is not automatic. You need the SEIS3/EIS3 certificate, the claim window closes five years after the 31 January following the tax year, and selling within three years claws it back.
Cheaper downside argues for more, smaller positions. Ten £5,000 SEIS cheques risk about £13,750 in total, less than the perceived risk of three £10,000 cheques.

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Most angels think a £10,000 SEIS cheque puts £10,000 at risk. For a taxpayer who claims the reliefs, the real number is £2,750.

The SEIS arithmetic

You invest £10,000 in a SEIS-qualifying company.

SEIS income-tax relief returns 50%. That is £5,000 off your income-tax bill for the year.

If the company fails outright, loss relief applies to the remaining £5,000 at your marginal rate. For an additional-rate (45%) taxpayer that is another £2,250.

True downside: £2,750, or twenty-seven and a half pence in the pound.

The EIS arithmetic

EIS works the same way at a 30% relief rate. On £10,000: £3,000 of income-tax relief, then loss relief on the remaining £7,000 at 45% is £3,150. True downside: £3,850, or 38.5p in the pound.

The catches the paperwork hides

The relief isn't yours until you claim it. You need the SEIS3/EIS3 certificate from the company, and the claim window closes five years after the 31 January following the tax year in which you invested.

Selling within three years claws the relief back. The holding period is part of the deal.

The rates above assume an additional-rate taxpayer with enough income-tax liability to absorb the relief; at 40% the numbers shift slightly.

Why this changes portfolio construction

If your true downside per position is 27.5% to 38.5% of the cheque, the case for more, smaller positions strengthens: ten £5,000 SEIS cheques risk about £13,750 in total, less than the perceived risk of three £10,000 cheques. Yet most UK angel portfolios hold fewer than ten positions.

The same relief by other names

Search calls this many things: angel investor tax relief, the angel tax credit (an American term; the UK equivalents are EIS and SEIS income-tax relief), the SEIS tax break. Whatever the name, the arithmetic above is the whole story: 30% or 50% back on the way in, loss relief on the way out, and no capital gains tax after three years.

Tero's portfolio view computes the net exposure per position automatically, chases missing certificates, and watches every claim deadline. Information, not tax or investment advice. Confirm your position with your accountant.

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Questions this guide answers

How much of a £10,000 SEIS investment is actually at risk?: For an additional-rate taxpayer who claims both reliefs, about £2,750. SEIS income-tax relief returns £5,000 up front, and if the company fails, loss relief on the remaining £5,000 at 45% returns a further £2,250.
What is the real downside on a £10,000 EIS investment?: About £3,850 for a 45% taxpayer: £3,000 of income-tax relief up front, then loss relief of £3,150 on the remaining £7,000 if the company fails. That is 38.5p in the pound.
Is SEIS or EIS relief automatic?: No. You need the SEIS3 or EIS3 certificate from the company, you must claim within five years of the 31 January after the tax year of the investment, and selling within three years claws the relief back.
Does the relief change how an angel sizes positions?: It strengthens the case for more, smaller positions. Ten £5,000 SEIS cheques risk about £13,750 in total, less than the perceived risk of three £10,000 cheques.

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