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by Undo Capital
December 15, 2025
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What Is Money-At-Risk (Risk-to-Capital Condition)?

Money-at-risk refers to the requirement that an investor’s capital must be genuinely exposed to real commercial risk for SEIS or EIS tax relief to apply.

Money-At-Risk (Risk-to-Capital Condition) Meaning

The money-at-risk meaning is central to HMRC’s risk-to-capital test under SEIS and EIS. To define money-at-risk in practice, investors must face a realistic chance of losing their investment and have the potential for a genuine commercial return. Any structure that limits downside, such as guaranteed exits, capital protection, side agreements or pre-arranged returns, can breach this condition. A clear money-at-risk definition ensures that tax relief only supports real growth investment, not low-risk tax planning. It stands for true exposure to business success or failure.

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Disclosure Notice: This communication is issued by Undo Capital Limited (“Undo Capital”) and is provided strictly for informational purposes only. It contains general information and should not be relied upon as accounting, business, financial, investment, legal, tax, or other professional advice. Undo Capital is not regulated by the Financial Conduct Authority (FCA) and does not provide investment, financial, or tax advice. Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. Nothing in this communication constitutes, or should be construed as, a recommendation, offer, or solicitation to purchase or sell any security or financial instrument.
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Disclaimer: Our services are designed to assist startups and businesses with company formation, legal agreements, and funding-related documentation. We do not provide investment advice, financial advice, or tax advice, nor are we regulated by the Financial Conduct Authority (FCA). Participating in startups and early-stage enterprises carries inherent risks, including limited liquidity, absence of dividends, potential loss of investment, and dilution. Any decisions regarding investments should be made independently by the investor as part of a well-diversified portfolio.