In the 2025 Budget, significant increases to the Venture Capital Trust (VCT) and Enterprise Investment Scheme (EIS) limits were announced.
This is good news for investors, start-ups and fast-growing companies, as it’s intended to allow investors to make qualifying investments in companies growing beyond the initial start-up phase.
While increasing the overall investment limits for VCT and EIS, the Budget also included a reduction in the amount of the upfront income tax relief available to VCT investors from the current rate of 30% to 20%.
What is changing specifically?
The key changes are as follows:
- Gross assets requirement increases to £30 million from £15 million immediately before the issue of the shares or securities and to £35 million from £16 million immediately after issue
- Annual investment limit that companies can raise to £10 million from £5 million and for knowledge-intensive companies to £20 million from £10 million
- Company’s lifetime investment limit is increased to £24 million from £12 million and for knowledge-intensive companies to £40 million from £20 million
- The income tax relief that can be claimed by an individual that is investing in VCT will decrease to 20% (the current rate is 30%)
When do the changes take effect?
The changes will take effect from 6 April 2026.
How can we help you?
If you’re interested in finding out more about your company’s eligibility for the UK’s generous venture capital reliefs (VCT, EIS and SEIS), or are considering investing in UK companies with the benefit of these reliefs, please see our webpage here.
If you’re a start-up, or growing early-stage business, we have a talented team of venture capital and equity investment specialists. For any queries regarding Venture Capital reliefs, start-up and early-stage companies, follow-on investments, seed funding or the aforementioned tax reliefs, please contact Zickie Lim, Ed Sloan or John Kahn, who’ll be more than happy to help.
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