Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Venture capital definition

What does Venture capital mean? Venture capital describes professional investment in early‑stage or high‑growth companies, typically by specialist funds or angel syndicates, in return for equity or equity‑linked instruments. It is a descriptive market term rather than a defined concept in UK or Irish legislation or case law, though related regimes (for example UK venture capital trusts (VCTs), EIS/SEIS, and Ireland’s EIIS) provide tax reliefs to qualifying investments. Key legal features include minority stakes, staged funding rounds (seed, Series A, etc.), preferred shares, and convertible instruments (such as convertible loan notes or, in the UK, advance subscription agreements). Typical investor protections are liquidation preference, anti‑dilution,...

UK VCT qualifying holdings: investee company requirements—trading, control, gross assets, employee limits, KIC—and Finance Bill 2026 changes

Published by a LexisNexis Tax expert

Practice notes

FORTHCOMING CHANGES to EIS and VCT financial limits and call for evidence on tax support for entrepreneurs:

At Budget 2025, the government confirmed a cut to the upfront income tax relief for an individual’s VCT investment from 30% to 20%. The EIS upfront income tax relief remains at 30%. It also set out three updates affecting both the EIS and VCT regimes:

Raising the annual fundraising ceilings companies may secure under EIS and VCT from £5m to £10m, and for knowledge‑intensive companies (KICs) from £10m to £20m.
Increasing the lifetime company risk finance cap from £12m to £24m, and for KICs from £20m to £40m.
Uplifting the gross assets thresholds an investee must not exceed from £15m to £30m before Shares are issued, and from £16m to £35m thereafter.

These reforms will be legislated in Finance Bill 2026 and will take effect from 6 April 2026. Also at Budget 2025, the government launched a call for evidence (closing date: 28 February 2026) on the impact of existing tax incentive schemes and options to provide further...

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Web page updated on 26/05/2026

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