VCTs and EISs have been subject to a range of rule changes in recent years, with some of the most significant being introduced last year in response to revised EU state aid rules. As a result, the nature of some schemes has changed; for example, VCTs can no longer make fresh investment in management buy-outs (MBOs).

Interest in VCTs and EISs has grown as more aggressive forms of tax planning, such as film leasing schemes, have come under sustained HMRC attack and pension opportunities have been further constrained. Unfortunately, the increased interest has met with some slowdown in supply as VCT and EIS providers have taken time to restructure their products in response to the latest legislative changes. One consequence has been that some recent issues have been over-subscribed in a matter of days.

Year End Planning:  The best VCT offers can sell out quickly – even before you read about them in the weekend press. Make sure you let us know if you want to make any VCT investment before 6 April.