VCM1010 - Venture Capital Schemes: Latest updates in the venture capital scheme manual: what's new
Finance Act 2026 introduced the following changes for investments on or after 6 April 2026.
Annual and maximum investment limits
The annual and lifetime investment limits were increased for most companies.
Knowledge-intensive companies raising finance under EIS/VCT can receive up to:
- £20 million of relevant investments in total in any 12-month period
- A maximum of £40 million of relevant investments in its lifetime
Companies that are not knowledge-intensive and are raising finance under EIS/VCT can receive up to:
- £10 million of relevant investments in total in any 12-month period
- A maximum of £24 million of relevant investments in its lifetime
The existing limits will continue to apply to the specified companies (see definition in VCM12031 for EIS and VCM55131 for VCT).
Gross Assets limit
The gross assets limits were increased for most companies.
Most companies must not have gross assets worth more than:
- £30m immediately before the issue of the shares, and
- £35m immediately after the issue.
The existing limits will continue to apply to the specified companies.
Front end income tax relief rate
The rate of front end income tax relief for investment in a VCT was changed from 30% to 20%.
Finance Act 2018-19 introduced the following changes:
Risk to Capital condition
ITA07/S157A for EIS; ITA07/S257AAA for SEIS ITA07/S286ZA for VCTs;
Investments made on or after 15 March 2018 under the EIS, SEIS and VCTs must meet the risk-to-capital condition. The company will have to demonstrate that it has objectives to grow and develop its trade in the long term, and, the investment must carry a significant risk.
Relevant investment
ITA07/S173A for EIS; VCT ITA07/S292AA; SITR ITA/S257MNB/ MNA
Amends the definition of ‘relevant investments’. All risk finance investments are counted towards the lifetime funding limit for companies receiving investment under the tax-advantaged venture capital schemes. For the EIS and VCTs, the limit is £12 million for most companies and £20 million for knowledge-intensive companies. For SITR, the limit is £1.5 million.
Knowledge intensive companies increased lifetime limit for EIS and VCTs
From 6 April 2018 knowledge-intensive companies (KICs) will be able to raise £20 million of investment in the lifetime of the company or group provided the company meets the definition of a KIC. The maximum amount an individual investor can invest each year in EIS companies is £2m per year, provided any investments over £1 million are in one or more KICs.
Procedural changes for Venture Capital schemes
Advance Assurance changes for EIS, SEIS, VCTs and SITR
From 6 December 2017, changes to the advance assurance service provided by HMRC: HMRC will not give an opinion on speculative investments, where the company is raising a tax-advantaged investment for the first time.