The Spring Statement
2026
Venture capital schemes Generous tax reliefs are available for those who invest in Enterprise Investment Scheme (EIS) companies or Venture Capital Trusts (VCTs), which are quoted investment trusts that invest in EIS-type companies. These schemes have a lot of detailed conditions attached to them, some of which are being changed to make the schemes available to larger companies. The gross assets requirement that a company must not exceed for the EIS and VCT will increase to £30 million (from £15 million) immediately before the issue of the shares or securities, and to £35 million (from £16 million) immediately after the issue. The annual investment limit that caps how much companies can raise will increase to £10 million (from £5 million) and, for ‘knowledge-intensive’ companies, to £20 million (from £10 million). The company’s lifetime investment limit will increase to £24 million (from £12 million) and, for knowledge-intensive companies, to £40 million (from £20 million). These increases apply only to qualifying companies that are not registered in Northern Ireland trading in goods or the generation, transmission, distribution, supply, wholesale trade or cross-border exchange of electricity. These companies will remain eligible only for the current scheme limits. The Income Tax relief that can be claimed by an individual investing in a VCT will reduce to 20% from the current rate of 30%. All these changes take effect from 6 April 2026. Capital Gains Tax Rates and annual exempt amount In her 2024 Budget, the Chancellor increased most rates of CGT and reduced a number of reliefs. The 2025 Budget document included the forecast that the annual yield from the tax will more than double from £13.7 billion at the start of this Parliament to £30 billion in 2030/31. The CGT annual exempt amount remains £3,000 for individuals and estates and £1,500 for most trusts. Individuals will continue to pay 18% on gains that fall within their basic rate income tax band, and 24% on gains above that. As with the changes mentioned above on dividend allowance, the low level of CGT exemption will require more people to have to calculate small chargeable gains and report them to HMRC, and increases the relative attractiveness of holding chargeable investments in a tax-free ISA.
Incorporation relief When a sole trader or partnership transfers a business to a company in exchange for shares, any capital gains arising on the disposal of chargeable assets may be deferred by ‘incorporation relief’. Up to 5 April 2026, this operates automatically where the conditions are satisfied. From 6 April 2026, it will be necessary to make a claim for the relief to apply. Business Asset Disposal Relief (BADR) and carried interest As announced in 2024, the tax rate on gains that qualify for BADR will rise in 2026/27 from 14% to 18%. The relief remains available on qualifying gains within a lifetime limit of £1 million. Investors’ Relief can give a reduced CGT rate to qualifying investors in qualifying companies for which they do not work. The lifetime limit is also £1 million and the rate of tax will rise in line with BADR. Carried interest is a performance-based share of profits that investment fund managers receive, typically after investors achieve a minimum return. Up to now it has been taxed as a capital gain, but the rate applicable was increased in 2025/26 to a flat rate of 32% for individuals, estates and trusts. From 2026/27, carried interest will be brought within income tax and will be subject to its own specific rules. Cryptoassets Gains realised on cryptoassets such as Bitcoin are likely to be chargeable to CGT. In order to make sure that chargeable gains are being reported, the government will require UK-based Cryptoasset Service Providers to report on their UK tax resident customers under the Cryptoasset Reporting Framework. Information for first reports to HMRC is being collected from 1 January 2026 and will be reported to HMRC in 2027.
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