I invested in a community project under the Seed Enterprise Investment Scheme. In the year I invested I claimed SEIS tax relief on the investment. In return for my investment I received shares in the project.

Now I have received a payment from the project along with a certificate describing the payment as “gross share interest”.

Should this be included with interest earned from bank accounts etc on my tax return, or is there a separate box I should put it in? There is no other obvious place to put it.

  • Congrats on making an SEIS investment. Is it definitely not a dividend? Can you tell a bit more about the type of enterprise or the type of shares you received? ‘Share interest’ is an unusual description (only heard of it for building society PIBS…) – marktristan Aug 9 '18 at 8:30
  • Nothing in the paperwork describes it as a dividend, they have used the word "interest" throughout. The scheme is a community solar farm, and the organisers have set up an "Industrial and Provident Society for the Benefit of the Community" to administer it. I made a small investment (£500) 3 years ago and have received £15 in "share interest" in each of the last two calendar years so we're not talking massive amounts of money here....! – Vicky Aug 9 '18 at 10:27
  • Ah I see so it's a member society with interest bearing shares, sounds a lot like those building society PIBS! – marktristan Aug 9 '18 at 10:28
  • So does that mean the interest does get recorded in the same place as bank account interest on my tax return? I haven't heard of PIBS before. – Vicky Aug 9 '18 at 10:29
  • (I have also just found another note that says the lifetime of the shares is 21 years at which point the capital will be returned to the investors). – Vicky Aug 9 '18 at 10:30

Mutual institutions don't have ‘share capital’ in the same way as limited companies so they are effectively debt deposits and what you're receiving should be, in my view, added to the interest section of tax return as you initially suspected.

Depending on your income tax bracket, you can earn up to £5,000 in interest tax-free – higher than the dividend tax threshold, so this may be a good outcome for you.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.