ideastack·9 min read·
IP assignment from your sole-trader period to your new Ltd: the silent SEIS-killer for UK indie hackers (2026)
You built the MVP as a sole trader. You have 50 paying customers. You incorporate, raise GBP 75k SEIS, and four weeks later HMRC writes back: SEIS refused, the company does not own the asset it is raising on. The IP is still legally yours - the sole trader. The fix is a one-page IP assignment deed, executed before the SEIS Advance Assurance application is filed. This walks the timing, the deed template, and the three SEIS-killer mistakes UK indie hackers make on the sole-trader-to-Ltd transition.
You built the MVP nights and weekends as a sole trader. You hit 50 paying customers, GBP 1.4k MRR, and a steady growth curve. You incorporate a Ltd, raise GBP 75k SEIS at a GBP 750k pre-money valuation, and four weeks later HMRC writes back: SEIS Advance Assurance refused. The reason is a single line buried in the Small Companies Enterprise Centre's response: "The Company does not appear to own the trade or intellectual property described in the application." The IP - your codebase, your domain, your brand - is still legally yours. The sole trader. Not the Ltd.
The fix is a one-page IP assignment deed, executed before the SEIS Advance Assurance application is filed. It is the simplest piece of paper in the UK indie SaaS founder's incorporation pack and it is the most commonly missed. Search "IP assignment sole trader Ltd UK" and you get the same paid services - Sprintlaw at GBP 295, FounderCatalyst bundled with incorporation, Harper James for the GBP 800 bespoke version. None of them flag that this is the single piece of paperwork most likely to kill a SEIS application before it gets read.
This post walks why HMRC asks the question, the one-page deed structure, the timing relative to SEIS Advance Assurance, the three killer mistakes UK indie hackers make on the sole-trader-to-Ltd transition, and a worked timing example for a January 2026 incorporation aiming for SEIS money in by May 2026.
Why HMRC asks "what assets does the company own"
The SEIS Advance Assurance application form (specifically the SEIS1 / SEIS2 family) asks: "What assets does the company own that are used in the trade?" HMRC asks because SEIS is a tax break on investment in a company carrying on a qualifying trade. If the company does not own the assets used in the trade, the company is not really carrying on the trade - it is acting as a contractor or licensee for whoever does own the assets. That is not what SEIS is for.
Concretely, HMRC is testing whether the GBP 75k of SEIS investment is going into a real, operating business owned by the company - or into a shell that licenses someone else's IP and is therefore neither doing the trade nor a sensible recipient of risk capital.
For a UK indie hacker, the question is binary: at the moment the SEIS investment cheque is written, does the Ltd own the codebase and brand? If no, the application is refused.
How IP defaults to the sole trader (not the Ltd)
When you build software as a sole trader, the IP - copyright in the code, any trademarks in the brand, the domain name, the customer database, the trade name itself - is owned by you personally. You are the sole trader. There is no separate legal entity.
When you incorporate a Ltd, the new company is a fresh legal person with no automatic claim on anything you built before. The Ltd does not inherit your IP just because you named the company after the product. The Ltd does not own your code just because you stop trading as a sole trader. Incorporation is a clean break - the new company starts owning nothing, and you (the sole trader, now also the founder of the Ltd) still personally own everything you built before.
To get the IP into the Ltd, you have to assign it. That is a formal legal transfer, signed by both parties (you in your personal capacity, and you on behalf of the Ltd as a director), executed as a deed, with consideration. Without it, the Ltd is licensing or using IP that belongs to someone else - even though that someone else is also the founder.
The one-page IP assignment deed - structure
The deed itself is short - genuinely one page is sufficient for a clean indie SaaS case. The structural elements:
1. Parties. Two parties: the assignor (you, in your sole-trader capacity, full name and address) and the assignee (the Ltd, registered name, company number, registered office).
2. Recitals. Two paragraphs of "background." Recital A: the Assignor has, prior to the date of this Deed, developed certain intellectual property in connection with the [name] business carried on as a sole trader. Recital B: the Assignor wishes to assign that intellectual property to the Assignee on the terms set out below.
3. Definitions. One short definition: "Assigned IP" means the items listed in the Schedule, plus all goodwill, copyrights, trademarks (registered or unregistered), domain names, trade secrets, know-how, and any rights of action.
4. Assignment clause. The operative paragraph: "With effect from the date of this Deed, the Assignor hereby assigns to the Assignee absolutely all of the Assignor's right, title, and interest in and to the Assigned IP, together with all rights of action, powers, and benefits attaching to it."
5. Consideration. A nominal sum, typically GBP 1, sometimes GBP 100. The consideration matters for the deed to be enforceable; the amount does not need to reflect market value for an assignment between a founder and their own company.
6. Schedule of IP. A bullet list of the specific assets being assigned: the codebase (with a Git repository URL and commit hash at the date of assignment); domain names (eg. mybrand.co.uk, mybrand.com); any registered or unregistered trademarks; the customer database; the trade name; the goodwill of the business.
7. Governing law. "This Deed shall be governed by and construed in accordance with the laws of England and Wales."
8. Execution. Both parties sign as a deed. For the Ltd, this means either two directors or one director plus a witness. For the sole trader, just you, with one witness.
That is the entire document. It runs to one A4 page in any standard layout. Tools like SeedLegals, FounderCatalyst, and JuroLaw have templates; a startup-savvy lawyer will produce a bespoke version for GBP 200-500.
Timing - assign before the Advance Assurance application
The SEIS process for a UK indie hacker has a clean order of operations:
- Incorporate the Ltd. Companies House, GBP 50 online, same-day in most cases.
- Open the company bank account. Tide / Starling / Monzo Business / Mettle. 1-7 days.
- Execute the IP assignment deed. Signed by you (as sole trader) and you (as Ltd director) plus a witness. Same day.
- Issue the founder shares. Reflecting the cap-table position the SEIS round will price against.
- Prepare the Advance Assurance pack. Business plan, financial projections, cap table, and the SEIS1 / SEIS2 application form.
- File the Advance Assurance application. HMRC turnaround is typically 4-8 weeks.
- On approval, run the SEIS round. Issue the SEIS investor shares.
- File the SEIS compliance statement (SEIS1 form). Within 3 years of the share issue, but practically right after the round closes.
- Issue SEIS3 certificates to investors. They use these to claim the 50% income tax relief on their personal tax returns.
The IP assignment fits at step 3 - before the Advance Assurance application is filed. If you file the application while the IP is still legally yours personally, HMRC's response time is the speed at which they reject, not the speed at which they approve.
Three killer mistakes UK indie hackers make
Three patterns trip up a clean SEIS application on the sole-trader-to-Ltd transition.
Mistake 1: assigning to the founder personally rather than the company. A surprising number of templates online (often US-derived) have the assignment going from "developer" to "founder" or to a personal trading name, not to the registered company. The assignment must name the registered Ltd by its full Companies House name and number.
Mistake 2: missing the schedule. Without the schedule of specific assets, the deed assigns "all IP" in a generic blob - which HMRC's compliance team will flag because it does not match the assets actually used in the trade. List the codebase repository, domain names, trademarks, customer data, trade name, and goodwill explicitly.
Mistake 3: missing the consideration. A deed without consideration can still be enforceable in English law (deeds do not technically require consideration), but HMRC sometimes raises a query when a transfer of valuable IP happens for nothing. Including a nominal GBP 1 or GBP 100 consideration removes the query and is a 30-second template fix.
A fourth pattern, slightly less common but worth flagging: assigning AFTER the SEIS round has closed. This sometimes happens when the founder realises mid-round that the assignment has been missed and rushes it through. HMRC's view is that the SEIS investment was made into a company that did not own the trade - the assignment after the fact does not retroactively cure the application. The fix is to assign before any investor cheque clears.
Worked timing example - January 2026 incorporation, May 2026 SEIS money
A realistic UK indie SaaS timeline for a sole trader who built MVP through 2024-25 and incorporates in January 2026:
| Date | Step | Why |
|---|---|---|
| Jan 5 2026 | Incorporate Ltd at Companies House | Clean Q1 incorporation, 6 April year-end works for first set of accounts |
| Jan 12 2026 | Open Tide / Starling business account | First investor cheque needs somewhere to land |
| Jan 15 2026 | Execute IP assignment deed (sole trader -> Ltd) | Before any SEIS application, before any equity issue |
| Jan 18 2026 | Issue founder shares (100,000 ordinary at GBP 0.01) | Establishes the cap table for SEIS round pricing |
| Feb 1-15 2026 | Prepare Advance Assurance pack (business plan, projections, cap table) | Gives time for the bank account, deed, and shares to settle |
| Feb 16 2026 | File SEIS Advance Assurance application | HMRC SCEC team turnaround is 4-8 weeks |
| Mar 30 2026 | HMRC Advance Assurance approval (typical 6-week turnaround) | The deed in step 3 means this comes back YES, not NO |
| Apr 1-30 2026 | Run the SEIS round (close angels, issue SEIS shares) | Bank account, AA approval, and assignment all in place |
| May 5 2026 | File SEIS Compliance Statement (SEIS1) | Within 4 months of share issue is the practical norm |
| May 12 2026 | HMRC issues SEIS3 certificates to investors | Investors claim 50% income tax relief on their tax returns |
The IP assignment in step 3 - January 15, 2026 - is the single piece of paperwork that turns this from a refused application into an approved one. It costs GBP 0 if you DIY from a template and GBP 200-500 with a professional service. It saves the 6-week refusal-then-resubmit loop.
What the deed does not cover
A few common misconceptions about what an IP assignment deed handles versus what it does not:
- Tax on the transfer. The transfer itself is between connected parties (you and your Ltd). HMRC does not generally tax such transfers as long as the consideration is not above-market. There is no stamp duty on IP transfers in the UK (stamp duty is on shares and land).
- VAT. Unlikely to apply on a one-off transfer of business assets between connected parties at incorporation, but worth checking if the sole-trader business was VAT-registered.
- Existing customer contracts. The deed transfers ownership of contract rights, but the novation of customer contracts to the new Ltd usually requires customer consent or a notification clause in each contract. For B2C SaaS subscriptions this is typically handled by a Terms of Service update notification; for B2B contracts it can require a written novation agreement per customer.
- Trademarks already registered. If you have a UK or EU trademark registration in your personal name, the assignment must be recorded with the IPO (UK) or EUIPO. Standard fee is GBP 50 per mark to record the assignment.
These are extensions, not blockers. The deed itself is the critical step; the trademark recording and contract novation can follow without breaking the SEIS pathway.
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Frequently asked
What if I never traded as a sole trader and built the MVP in my spare time as a hobby?
The IP still belongs to you personally - the "sole trader" framing is informal. The deed is structured the same way: assignor is you (full name, residential address), assignee is the Ltd. Recitals describe the IP as "developed by the Assignor in a personal capacity" rather than "in connection with a sole trader business." The substance is identical. HMRC's question is whether the company owns the IP, not whether you formally traded.
Do I need to record the assignment anywhere public?
For most IP - copyright in code, unregistered trademarks, domain names, customer data, goodwill - no. The deed itself is the legal record and is held privately by both parties. For *registered* trademarks (UK or EU/EUIPO), the assignment should be recorded at the relevant trademark office; the fee is around GBP 50 per mark in the UK. For domain names, you separately update the registrant details with the registrar (typically free or a small fee).
What if I already filed the SEIS Advance Assurance application without doing the assignment?
Withdraw the application, execute the deed, refile. HMRC's turnaround on a refused application is faster than on a fresh one - they often respond within 2-3 weeks of refusal. Refiling with the deed in place fixes the issue cleanly. Trying to argue the original application around the missing deed is harder than just doing it properly.
Can the deed be backdated to before incorporation?
No. A deed cannot be dated before the assignee (the Ltd) legally existed. The earliest valid date for the deed is the date of incorporation. In practice the deed is signed within 1-2 weeks of incorporation - which is fine, because it just needs to be in place before the SEIS application or the share issue, whichever comes first.
Does this affect Business Asset Disposal Relief on a future exit?
No, in fact it strengthens it. BADR requires you to have owned the shares in a qualifying trading company for at least 2 years before disposal. The clock starts at the date of share issue in the Ltd, not at the date you started trading as a sole trader. Getting the IP into the Ltd cleanly via assignment is what allows the Ltd to be a qualifying trading company - so the IP assignment is a precondition for the BADR clock to even start running.
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