George Osborne has announced measures to remove restrictions relating to Enterprise Investment Schemes (“EIS”) and Venture Capital Trusts (“VCT”).

Both schemes are intended to help smaller, riskier UK companies to compete for equity finance, by giving tax breaks to both the companies and their investors.

In relation to the EIS, the Chancellor will remove the £500 minimum investment limit, widen the definition of shares which qualify for relief and relax the rules defining when a person is connected to a company through an interest in its capital. These measures will apply to EIS shares issued on or after 6th April 2012.

For VCTs, the £1 million limit on investment by a VCT in a single company (except for companies in a partnership or joint venture) will be removed in relation to shares issued on or after 1st April 2012.