VCM55131 | VCT: VCT qualifying holdings:   amount raised through risk finance investments requirement: maximum amount raised annually

ITA07/S292A

Finance Act 2026 raises the annual limits on relevant investments for most companies. The existing limits will continue to apply to the specified companies (see VCM55130).

Shares or securities issued on or after 6 April 2026

Knowledge-intensive companies issuing shares or securities to a VCT can receive up to:

• £10 million of relevant investments in total in any 12-month period for specified companies

• £20 million of relevant investments in total in any 12-month period for all other companies.

Companies that are not knowledge-intensive and are issuing shares or securities to a VCT can receive up to:

• £5 million of relevant investments in total in any 12-month period for specified companies.

• £10 million of relevant investments in total in any 12-month period for all other companies.

Shares or securities issued before 6 April 2026

Knowledge-intensive companies issuing shares or securities to a VCT can receive up to:

• £10 million of relevant investments in total in any 12-month period

Companies that are not knowledge-intensive and are issuing shares or securities to a VCT can receive up to:

• £5 million of relevant investments in total in any 12-month period

The relevant investments (see VCM55130) that are to be taken into account for determining if the annual investment limit is breached are:

• Relevant investments in a company before it became a 51% subsidiary of the issuing or relevant company

• Relevant investments in a company where the money was used by a subsidiary of that company, and that subsidiary company subsequently became a subsidiary of the issuing or relevant company

• Investments in a relevant transferred trade.

However, if a subsidiary left the group before the end of the year, any relevant investments made in it after it left the group are not taken into account.

A transferred trade is one that has been transferred to the investee company, or one of its subsidiaries, in the year up to the date of the investment where money raised through risk finance investments was employed in that transferred trade.

Where only part of a relevant investment is used for a relevant transferred trade - for example, where the money from a relevant investment is shared between two subsidiary companies and the business of one of those companies is transferred to the issuing or relevant company - only the money used in the trade that was transferred counts towards the annual limit.

A trade includes part of a trade, and a trade includes any business or profession, including where the activities are preparatory to carrying out a trade.

Example 1

Company A acquired the total issued share capital of Company B from Company Z on 1 December 2025. Company A does not have any other subsidiaries. Both Company A and Company B are less than 7 years old, and their business activities were started from scratch after they were incorporated.

Company A wishes to raise money from EIS investors on 10 April 2026 to employ in Company B’s qualifying activities. Company A is neither a knowledge-intensive company nor is it a specified company and so the annual limit is £10 million. It has not received any risk finance investments in the last 12 months.

Company Z had received £3 million of loans from a VCT on 1 May 2025, all of which were employed in Company B.

The maximum amount of risk finance investments Company A can raise on 10 April 2026 is £7 million.

Example 2

The facts are the same as for Example 1 except that Company Z had employed only £1 million of its £3 million investment in Company B’s activities. It employed the remaining £2 million in its other subsidiary, Company Y.

In this case only the £1 million employed in Company B would count towards Company A’s annual investment limit. Company A would be able to raise up to £9 million on 10 April 2026.