What percentage of gains that are reinvested in a SEIS are exempt from Capital Gains Tax (CGT)?

When considering the tax benefits associated with the Seed Enterprise Investment Scheme (SEIS), it's important to understand the incentives provided for investors. In particular, SEIS offers significant relief on capital gains that are reinvested into qualifying companies.

Reinvestment of gains that are realized outside the SEIS into SEIS-eligible shares allows investors to claim relief on 50% of those gains against their Capital Gains Tax liability. This means that investors can effectively offset half of their gains from other investments by putting that money into new, high-risk startups that qualify under the SEIS framework.

This incentive is designed to encourage investment in small, startup businesses, which are often seen as riskier and thus harder to fund through traditional means. By allowing a 50% exemption for capital gains that are reinvested, the SEIS not only promotes entrepreneurship but also benefits investors by substantially reducing their overall tax burden on gains they might otherwise need to pay tax on.

The other percentages offered as choices do not accurately reflect the current tax benefits of SEIS regarding reinvested gains. For instance, 25%, 75%, and 100% do not align with the designed structure of the SEIS tax relief, reinforcing that 50% is the accurate figure for