Investor tax relief schemes extended to April 2035

There is good news for individuals making investments under the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs), as these reliefs were due to expire for shares issued after 6 April 2025, but have now been extended through to April 2035.

The intention to extend these two reliefs for a further ten years was made by the previous government in the 2023 Autumn Statement, and was then enacted in Finance Act 2024, s11, and brought into force by subsequent regulations.

The EIS and the VCT schemes provide tax relief for individuals investing in small and medium-sized companies, and any shares issued before 6 April 2035 will qualify for relief under the schemes, provided all other conditions are met.

The schemes are important in encouraging investors to provide early-stage equity finance for businesses as they offer incentives to investors of up to 30% upfront income tax relief and an exemption from capital gains tax on any profits made after the sale of shares.

EIS

EIS offers tax relief to individuals that invest in new shares in qualifying companies, with investors able to invest up to £1m (or £2m in knowledge-intensive companies that focus on research and development).

Investors can also obtain loss relief through the EIS if the shares are held for at least two years.

VCTs

VCTs are listed companies that invest in early-stage trading companies on behalf of individuals who can invest up to £200,000 per year in new VCT shares. Dividends received from VCT’s are tax-free.

Over £41bn has already been raised through both schemes since their launch.

Further information

HMRC has further information on EIS and VCTs on its website.

Contact us

If you would like more information about early-stage investing or to discuss how these schemes could help you, please contact a member of our Tax Team for a conversation, or visit our Private Equity Backing page.