To claim SEIS loss relief, work out the allowable loss on your failed shares, then enter it on the SA108 Capital Gains summary pages of your Self Assessment return, choosing whether to set the loss against your income tax or your capital gains for the year. The Seed Enterprise Investment Scheme already gave you 50% income tax relief when you subscribed, and loss relief is the second layer: if the shares later become worthless or are sold at a loss, you can recover a further slice of what you put in. Two things trip people up. The claim goes on SA108, not on the SA101 where you claimed the original 50% relief. And the deadline for setting the loss against income is strict; miss it and that route closes for good.
Work Out the Allowable Loss First
HMRC does not treat your full cash loss as the allowable loss. You have to reduce the cost of your shares by the income tax relief you already received and kept, and by any sale proceeds.1HM Revenue & Customs. Capital Gains Tax and Enterprise Investment Scheme 2024
A worked example. You invested £20,000 and claimed 50% SEIS relief, saving £10,000 on your tax bill. The company folds and the shares are worth nothing. Your cash loss is £20,000, but your allowable loss is £10,000 because you already recovered the other £10,000 through the initial relief. If you sold the shares for £3,000 rather than nothing, subtract that too: the allowable loss becomes £7,000.
If any part of your original income tax relief was withdrawn before the loss arose, only the relief you actually kept comes off the cost. Your SEIS3 certificate and the earlier tax return that recorded the 50% claim are the two documents that pin down the numbers.
Choose Income Tax or Capital Gains
You can set the allowable loss against either your income tax or your capital gains for the tax year of the loss, or split it between the two. The choice is worth doing the maths on, because the effective saving depends on the rate that applies.
For higher and additional rate taxpayers, the income tax route is usually more valuable. A £10,000 allowable loss saves £4,000 at the 40% rate and £4,500 at the 45% additional rate.2GOV.UK. Income Tax Rates and Personal Allowances A basic rate taxpayer would recover only £2,000. Capital gains tax rates for most assets are 18% or 24%, so a higher rate income taxpayer almost always does better claiming against income.
One useful feature of the income tax route: the general reliefs cap of £50,000 or 25% of income does not apply to losses on SEIS shares.3HM Revenue & Customs. HS286 Negligible Value Claims and Income Tax Losses on Disposals of Shares 2026 The relief comes off your total income before your personal allowance is applied, which is why the effective saving tracks your marginal rate.
The capital gains route makes sense if you have large chargeable gains in the same year from property or other investments and your income tax rate is low. You can also carry the loss back to the previous tax year, and any unused capital loss carries forward indefinitely, provided you register the loss with HMRC within four years.
Where the Claim Goes on Your Return
Both routes are claimed through the SA108 Capital Gains summary pages.4GOV.UK. Self Assessment Capital Gains Summary SA108 The SA101 is only for claiming the initial 50% relief at the point you subscribe for shares; loss relief sits entirely within SA108.
Setting the Loss Against Capital Gains
Enter the disposal on the shares and securities section of SA108. Proceeds will often be zero if the company has been dissolved. Put your total allowable losses for the year in box 35 on page CG 2.5HM Revenue & Customs. Capital Gains Tax Summary Notes In box 54 (any other information) on page CG 4, give the company name, registration number, share details, and the date the loss arose. HMRC will set the loss against your chargeable gains, and any unused portion carries forward.
Setting the Loss Against Income
Three entries on SA108 do the work. Include the loss in box 35 (total losses). Enter the amount you want to claim against income in box 41. Enter the SEIS-attributable portion in box 42.3HM Revenue & Customs. HS286 Negligible Value Claims and Income Tax Losses on Disposals of Shares 2026 Then use box 54 to give full details: company name, registration number, country of incorporation, country of tax residency, the date the loss arose, and, if you want the deduction taken from a particular year first, say so explicitly.
Once the figures are in, the HMRC online portal recalculates your tax showing the loss relief applied. Check the summary against your SEIS3 and your own working before you submit.
When the Company Hasn’t Dissolved Yet: Negligible Value Claims
You don’t have to wait for liquidation or dissolution. If the shares have fallen to negligible value while you still hold them, you can make a negligible value claim, which treats the shares as if disposed of and reacquired at that negligible value and triggers the loss for tax purposes.6GOV.UK. Negligible Value Claims and Agreements
HMRC will want evidence the shares really are worthless: a statement of affairs and a letter from the liquidator confirming no return to shareholders, or, for a company that has ceased trading but is still on the register, balance sheets showing liabilities well in excess of assets.
There is a timing trap. Once the company is dissolved, you cannot make a negligible value claim; the shares are extinguished and the disposal is treated as happening on dissolution.6GOV.UK. Negligible Value Claims and Agreements If a struck-off notice is coming, make the negligible value claim first so you keep the flexibility to choose the tax year.
A negligible value claim can also be backdated to an earlier date when the shares were already worthless, provided you claim within four years of the end of the tax year you are backdating to.7HM Revenue & Customs. HS286 Negligible Value Claims and Income Tax Losses on Disposals of Shares 2025 That can be useful if a large gain in an earlier year could absorb the loss. State the date of the deemed disposal in box 54.
Watch the Deadline
The deadline for claiming SEIS loss relief against income tax is one year from the 31 January following the end of the tax year in which the loss occurred. For a loss in 2025/26, the Self Assessment filing deadline is 31 January 2027, and the loss relief claim itself must be made by 31 January 2028.3HM Revenue & Customs. HS286 Negligible Value Claims and Income Tax Losses on Disposals of Shares 2026 Miss it and the income tax route is permanently closed for that loss. Capital gains losses do not have the same one-year restriction; register them with HMRC within four years and they can be carried forward indefinitely.
If you filed and then realised you forgot the SEIS loss claim, you can amend the return within 12 months of the 31 January filing deadline.8GOV.UK. Self Assessment Tax Returns Deadlines After that, you would need to write to HMRC to make a standalone claim, and acceptance is at their discretion.
Documents to Have Ready
The single most important document is the SEIS3 certificate from the company, which confirms the scheme conditions were met, records the share issue date, and shows the amount subscribed.9HM Revenue & Customs. HS393 Seed Enterprise Investment Scheme – Income Tax and Capital Gains Tax Reliefs 2025 You don’t upload it, but HMRC can ask for it.
You also want proof of disposal (a letter from the liquidator confirming no return to shareholders, a Companies House dissolution notice, or a sale contract); bank statements or transfer records showing what you paid; the earlier tax return confirming the 50% relief you claimed and kept; and the company’s name, registration number, country of incorporation, and country of tax residency for box 54.3HM Revenue & Customs. HS286 Negligible Value Claims and Income Tax Losses on Disposals of Shares 2026 Missing SEIS3 certificates are the most common reason claims stall, so track yours down before you start the return.
The Three-Year Holding Rule Cuts Both Ways
SEIS shares carry a three-year holding period from the issue date. If you dispose of the shares within that period, HMRC claws back some or all of your original 50% relief, proportional to what you disposed of.10HM Revenue & Customs. Seed Enterprise Investment Scheme SEIS Re-investment Relief Identification of Disposals Examples
For loss relief, only the relief you actually kept is subtracted from your cost. If £4,000 of an original £10,000 relief is clawed back on an early disposal, you reduce your cost by £6,000 rather than £10,000, so the allowable loss is larger. If the company is still trading and you are considering selling at a loss, holding to the three-year mark preserves the original relief in full. If the company fails inside three years, the clawback happens automatically and you claim the loss on the adjusted figures.
Records and Penalties
Keep everything for at least five years after the 31 January submission deadline for the tax year of the claim.11GOV.UK. Business Records if You Are Self-Employed – How Long to Keep Your Records Records for a 2025/26 claim filed by 31 January 2027 should be kept until at least 31 January 2032. If HMRC opens an enquiry and you can’t produce the SEIS3, bank records, or disposal evidence, expect the claim to be rejected and any refund already paid to be recovered.
Penalties for inaccurate returns depend on the nature of the error. Careless mistakes attract a penalty of up to 30% of the additional tax. A deliberate error carries 20% to 70%, and a deliberate concealed error can reach 100%.12GOV.UK. Penalties an Overview for Agents and Advisers Interest runs from the date the tax was due. The two errors HMRC most often flags on SEIS loss claims are overstated losses where the investor forgot to subtract the 50% relief already received, and income tax claims filed after the one-year deadline. Both are avoidable if you follow the calculation and the timing.