Tax year end to-do list – 2025/26

A VCT is in many ways similar to an investment trust. It is a company listed on the London Stock Exchange that raises money and uses it to invest in young, innovative and often privately-owned companies.

When you invest, you could receive:

• Up to 30% income tax relief – save up to £60,000 on your income tax bill when you invest in newly issued VCT shares
• Generous allowance – invest up to £200,000 per tax year
• Tax-free dividends – no need to declare VCT dividends on your tax return and they won’t use up your dividend allowance, which is currently £500. VCT dividends are variable and not guaranteed.
• Tax-free growth – no CGT on gains

Note: From 6 April 2026, the rate of VCT (Venture Capital Trusts) income tax relief is being cut from 30% to 20%.

If you are considering investing in VCTs, these last few weeks before the end of the tax year could be the last opportunity to receive income tax relief at the higher rate of 30% – a tax break worth up to £60,000 if using the full £200k VCT allowance – and tax-free dividends (dividends are variable and not guaranteed).

The EIS (Enterprise Investment Scheme) incentivises investment in small and usually privately owned or AIM-quoted companies. You can invest directly in individual companies or in an EIS fund, where the fund manager makes the investment decisions.

When you invest, you could receive:

• Up to 30% income tax relief – up to £3,000 saving on a £10,000 investment 
• Carry back – potential to use the income tax relief against a previous year's tax bill
• Very generous allowance – up to £1 million per tax year (or £2 million if at least £1 million is in knowledge-intensive companies)
• Tax-free growth
• Capital gains deferral – defer capital gains from other investments, potentially indefinitely
• Loss relief – offset any future losses against your income
• Inheritance tax relief – potentially pass on your investment free of IHT

The Seed Enterprise Investment Scheme (SEIS) is designed to complement the EIS. SEIS companies are even smaller and younger than EIS ones, hence riskier. Accordingly, SEIS tax reliefs are more generous.

When you invest, you could receive:

• Up to 50% income tax relief – up to £50,000 saving on a £100,000 investment
• Carry back – potential to use the income tax relief against a previous year’s tax bill
• Generous allowance – £200,000 per tax year
• Tax-free growth
• Up to 50% capital gains reinvestment relief – halve the CGT due on gains from elsewhere
• Loss relief – offset any future losses against your income
• Inheritance tax relief – potentially pass on your investment free of IHT

ISAs are normally income and capital gains tax free – but not inheritance tax (IHT) free, so IHT of up to 40% could apply on death. 

Now there is an alternative. If you hold an AIM IHT portfolio in your ISA – possible since 2013 – you should be able to benefit from some IHT relief when you pass it on. Under current rules, AIM shares can qualify for 100% IHT relief. This will decrease to 50% (an effective IHT rate of 20%) from 6 April 2026.

You could invest your ISA allowance or transfer unlimited amounts from previous years’ ISAs and:

• Keep control of your portfolio – take cash out if you need
• Benefit from IHT relief after two years
• Keep the ISA benefits of tax-free growth and income

The Wealth Club Portfolio Service is specifically designed to provide high net worth and sophisticated investors with a best-value, sensible long-term home for their wealth.

You can choose from five portfolios – Conservative, Balanced, Growth, Adventurous Growth and Income – we manage them for you. See portfolios at a glance »