Measure
The government has announced that the annual limits for investing into Venture Capital Trusts (VCTs) and the Enterprise Investment Scheme (EIS) will double. The increases appear to relate to the size of companies into which investments can be made, with no changes to the annual investment limits for investments made by individuals.
The gross assets requirement that a company must not exceed for the EIS and VCT will increase to £30m (from £15m) immediately before the issue of the shares or securities, and to £35m (from £16m) immediately after the issue.
The annual investment limit that companies can raise will increase to £10m (from £5m ) and for knowledge-intensive companies to £20m (from £10m).
The company’s lifetime investment limit will increase to £24m (from £12m) and for knowledge-intensive companies to £40m (from £20m).
The rate of income tax relief on VCT investments will reduce from 30% to 20%.
This measure will affect companies that are seeking investment under the EIS and VCT scheme, and individuals investing in these companies.
These measures will take effect from 6 April 2026.
This measure supports start-ups and small and medium-sized companies seeking growth capital and will enable a greater range of companies to be involved with the scheme. This will be welcomed by those in the venture capital industry. However, the government has said it is reducing the amount of upfront VCT relief to ‘better balance’ the relief in comparison to the EIS.