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Note that this scheme closed to new investment from 6 April 2023 onwards.

SI relief is withdrawn if the SE or a 51% subsidiary¹ repays, redeems or repurchases any of its share capital at any time in the longer applicable period for the investment giving rise to SI relief. SI relief is similarly withdrawn where payment is made to give up the right to share capital which is then cancelled or extinguished². The intention is to prevent SI funds being used to provide an exit for other shareholders.

There are exceptions to the rule: it does not apply where the repayment etc already triggers a withdrawal of SI relief (e.g. because the share capital belongs to the investor or an associate)³; and it does not apply where a company is established via the issue of share capital of nominal value equal to the authorised minimum required by CA 2006 and those shares are redeemed within 12 months of issue⁴.

The clawback of SI relief is arrived at by applying