The Enterprise Investment Scheme and capital gains tax reinvestment relief are to be rationalised to create a unified scheme.
The changes, which take effect from April 6, will include an increase of 50 per cent to £150,000 a year in the amount that an individual can invest in new shares with the benefit of income-tax relief.
Investors will be able to defer substantial chargeable gains by investing in qualifying companies, whether or not they are able to qualify for income-tax relief under the scheme.
The new scheme will also benefit from measures, inc luding those announced at the time of the last Budget, which will target the reliefs more effectively to provide venture capital for trading companies.
Some of these measures will also apply for venture capital trusts and other reliefs.