Industry experts discuss what’s changed for EIS, SEIS and VCT investors, highlighting the growing importance of diversification and discipline.
Melissa Griffiths, Head of Sales at GrowthInvest said:
“Despite ongoing geopolitical uncertainty and heightened market volatility, demand for tax-efficient investments has remained strong as the tax year end approaches, particularly across VCT and IHT-focused products.
“The expected reduction in VCT income tax relief to 20% from the 2026/27 tax year has helped sustain robust demand for current fundraises. At the same time, IHT solutions have seen increased interest, as financial planning strategies respond to the planned reduction in inheritance tax relief on AIM investments to an effective 20% from April 2026.
“Looking further ahead, the inclusion of pensions within estates for inheritance tax purposes from April 2027 is expected to reinforce demand for both AIM and unquoted IHT strategies into the next tax year. Liquidity dynamics in the VCT market are also anticipated to strengthen, driven by increased buyback activity as the substantial £1.1 billion raised in the 2021/2022 tax year reaches its five-year maturity threshold, and provides further reinvestment opportunities.
“Tax-efficient investments, when used as part of a long-term financial planning strategy, appear relatively resilient to short-term geopolitical volatility due to the structural benefits of tax reliefs.”
Olivia Wing, Community Development Manager at the EIS Association, said geopolitical tensions are adding to economic uncertainty, with rising costs, supply chain pressures and market volatility creating challenges for early-stage businesses.
However, she noted that disruption can also drive innovation, with younger companies often better able to adapt and seize new opportunities.
For investors, this means balancing short-term volatility with long-term growth potential, while advisers should prioritise diversification and a measured approach to manage risk and support emerging UK businesses.
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