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SEIS and residential capital gains tax relief

Can you claim the tax relief against residential property capital gains.

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"Individuals who subscribe for shares in a SEIS qualifying company will receive tax relief of 50% on the cost of the shares, which is offset against the individual's Income Tax liability for the year in which the investment is made."

Does 'Income Tax liability' above include capital gains tax on the sale of a residential investment property? I.e if someone sells a residential property to investment in a SEIS qualifying company, will they get the relief? Assume no other income during the year.

Thanks in advance.

Replies (7)

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By Anonymous.
28th Sep 2020 16:19

exceljockey wrote:

Does 'Income Tax liability' above include capital gains tax

I'd be surprised, to be fair.

Thanks (2)
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By Tax Dragon
28th Sep 2020 17:15

Curious about what you are quoting, and whether you have read the rest of it.

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By richard thomas
28th Sep 2020 17:35

Whatever the quotation is from, it is right, subject to there being a maximum of £50,000. Section 257AB(1) ITA 2007 is what the quotation is a précis of. That subsection refers to relief being by way of a tax reduction at Step 6 in s 23 ITA 2007 so it can only be a reduction of income tax otherwise chargeable.

Not only that, but it does not reduce a person's income taxable at the higher rates so as to allow a reduction in the CGT rate, if relevant.

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By The Dullard
28th Sep 2020 17:40

Which bit of "Income Tax" is not understood? It's a tax, which is levied on income.

Have you considered CGT deferral relief? That might be a more fruitful avenue than the blind alley you've gone down.

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Scooby
By gainsborough
28th Sep 2020 18:08

I agree with The Dullard (although strictly speaking SEIS is reinvestment relief, slightly more generous than the EIS deferral relief).

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Replying to gainsborough:
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By exceljockey
28th Sep 2020 20:34

Thanks. I will need check whether they have registered for both SEIS and EIS as I am not the accountant for the SEIS company. Client specifically asked re SEIS so that was the basis of my question.

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By petestar1969
30th Sep 2020 10:17

Its a relief against income tax not CGT.

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