Budget: Blow to VCTs and EISs

clock •

VENTURE Capital Trust (VCT) and EISs could be forced into "riskier" company selections after the Chancellor slashed investment limits four-fold for the second year in a row.

In his Budget announcement, Chancellor Gordon Brown slashed investment limits on VCTs to a maximum of £2m in any year from its current limit of £8m of gross asset levels. The change takes effect on April 6, 2007. It is the second consecutive four-fold drop in the limit from £16m just over a year ago. The reduction brings UK VCT firms in line with their counterparts across the EU but could have a negative knock-on effect on investments. The cut back will, according to Chris Powell, investment specialist at Arc Fund Management, mean profits and volatility levels could be hit as VCT compa...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on VCTs / EIS

The new VCT landscape: What advisers and clients need to know

The new VCT landscape: What advisers and clients need to know

Combination of upfront income tax relief, tax-free dividends and tax-free growth potential

Rosalind Hudson
clock 09 October 2026 • 4 min read
The AI exposure problem: Why VCTs are the overlooked route in

The AI exposure problem: Why VCTs are the overlooked route in

The question advisers should be asking

Stuart Mant
clock 01 October 2026 • 6 min read
Why now is perhaps the time for advisers to revisit EIS

Why now is perhaps the time for advisers to revisit EIS

'For advisers, this creates an opportunity to engage clients in a different conversation'

Andrew Aldridge
clock 01 October 2026 • 6 min read