Background: SEIS & EIS enhancements, and Business Asset Disposal Relief shift
The UK government has adjusted key reliefs affecting early-stage investment and business disposals. Among changes from 6 April 2026:
- EIS & VCT schemes have increased annual and lifetime investment limits, gross assets thresholds, but reduced VCT income tax relief rate.(gov.uk)
- SEIS reinvestment relief rules clarified for tax year 2025-2026.(gov.uk)
- Business Asset Disposal Relief (BADR) rate increased from 14% to 18% for qualifying disposals disposed of on or after 6 April 2026.(gov.uk)
Key details and examples
SEIS (Seed Enterprise Investment Scheme)
- Gains realised in tax year 2025-2026 can be reinvested in qualifying SEIS shares to receive reinvestment relief, allowing up to 50% of the gain exempt from CGT subject to conditions. Maximum reinvestment relief is capped at £100,000.(gov.uk)
- SEIS income tax and capital gains relief require submitting form SEIS3 and holding shares for the qualifying period.(gov.uk)
EIS & VCT changes
- Gross assets limit for companies before share issue increased from £15m to £30m, and after issue from £16m to £35m. Annual investment limits raised to £10m (or £20m for knowledge-intensive companies); lifetime limits to £24m (or £40m for KICs).(gov.uk)
- VCT relief rate for Income Tax reduced from 30% to 20% from 6 April 2026. EIS still provides 30%.(gov.uk)
Business Asset Disposal Relief (BADR)
- Qualifying gains disposed on or after 6 April 2026 are taxed at 18% CGT under BADR. Before that, from 6 April 2025 to 5 April 2026, the rate was 14%.(gov.uk)
- Lifetime limit remains at £1 million, as per Entrepreneur’s Relief architecture.(gov.uk)
Strategic actionables
- Timing matters: If you plan to dispose of business assets, do so before 6 April 2026 to benefit from the lower 14% rate; after that the rate is higher. Plan ahead for share or business sale transactions.
- For investors in early-stage firms: consider investing under SEIS or EIS earlier, noting the increased limits and thresholds—maximising relief before potential future policy shifts.
- VCT investors must account for reduced Income Tax relief from 6 April 2026. Review existing allocations and projections—perhaps shift towards EIS or other reliefs where possible.
- Ensure eligibility: maintain holding periods, qualification of company (knowledge intensive where relevant), and necessary certifications (e.g. SEIS3, EIS compliance documents).
Example scenarios
- An investor has a chargeable gain of £80,000 in tax year 2025-26, and reinvests that full amount into qualifying SEIS shares: £40,000 (50%) of gain could be exempt from CGT, with £100,000 cap considered.(gov.uk)
- A business owner disposes of qualifying business assets on 1 April 2026: taxed at 14%. If the same disposal occurs on 1 May 2026, under new rules it's 18%. That switch increases tax on £500,000 gain by £20,000.
Caveats and compliance risks
- Ensure you hold the shares for the required period and that the business meets the definition of knowledge-intensive (if using higher thresholds).
- Keep supporting documents like SEIS3, EIS compliance statements—they’re essential for HMRC claims.
- Review lifetime limits carefully—once used, they limit future relief availability.
Final thoughts
Whether you’re an investor eyeing early-stage growth companies or a business owner planning exits or disposals, these changes have major tax consequences. Optimize timing, check eligibility, and stay compliant—because mis-steps can be costly under these new rates.