# Tax speculation mounts ahead of Budget as investors look to shelter gains

By Susannah Streeter — 2026-09-22

Susannah Streeter, chief investment strategist at Wealth Club, gives her thoughts on the tax speculation that is intensifying ahead of the Budget next month.

She said: “Tax speculation is ramping up ahead of the Budget, especially given the latest snapshot of the government coffers shows Prime Minister Andy Burnham and Chancellor John Healey are walking an increasingly tricky tightrope when it comes to the public finances.

“That is prompting fresh speculation about a potential increase in Capital Gains Tax, particularly if reported plans to raise the personal income-tax allowance from £12,570 become a reality.

“If the government is looking to put more money into people’s pockets by reducing their income-tax bill, it would need to find the money elsewhere, and CGT is increasingly being talked up as a potential source.

“For investors, the prospect of a higher CGT bill could mean some simply decide not to sell assets and hang onto them instead.

“But there are alternatives, including tax-efficient investment schemes that can shelter returns while also directing capital towards British businesses, laying the seeds for future growth.

“Government-backed venture capital schemes support young businesses which are seen as crucial to driving economic growth and the creation of high-value jobs for the future.

“Investing in these schemes is a bit like following in the footsteps of angel investors, but rather than backing a single start-up, you’re spreading your investment across a portfolio of young, ambitious businesses.

“Venture capital schemes like SEIS and EIS offer income, IHT and capital gains tax relief.

“Seed Enterprise Investment Scheme (SEIS) funds typically provide exposure to around 10-30 startups and offer the most attractive tax incentives. SEIS backs the very youngest businesses in the UK, often little more than an idea, but taking on the risk of investing comes with very generous reliefs.

“You can invest up to £200,000 each year and receive income tax relief of up to 50 per cent. In addition, any growth is tax-free, and you can also receive up to 50 per cent CGT relief on taxable gains you might have made elsewhere.

“The investment can qualify for IHT relief if it’s been held for at least two years at the time of death. If you lose money on your SEIS investment, you can write the loss off against your income tax bill for the current or previous tax year.

“The Enterprise Investment Scheme (EIS) invests in larger, more established startups and scaleups and also offers an attractive 30 per cent income tax relief.

“Any growth is also tax-free, and you can also defer taxable gains you might have made elsewhere. These investments can also be free from IHT (subject to limits) if they have been held for at least two years on death.

“VCTs are another option providing a tax shelter, although at 20 per cent up front relief the incentive isn’t quite so attractive. VCTs are stock market listed funds, not unlike investment trusts, which invest specifically in young, usually private businesses looking to fund growth.

“A single VCT will typically give you exposure to a portfolio of 30 -100 businesses, offering diversification under one roof. That makes them a popular port of call for investors with a large tax bill who have already maxed out their pension and ISA allowances.

“Most returns come through dividends, which are tax-free, as is any growth. To keep the tax relief, you must hold a VCT for at least five years.

“For investors, the venture schemes are not only highly tax efficient, which could be particularly attractive right now, but could also add diversification to an investment portfolio.

“The old adage – don’t let the tax tail wag the investment dog – should still be adhered to when it comes to a broad investment strategy.

“After all, too much switching and ditching stocks on rumour and speculation can prove highly detrimental over the longer term.

“However, it’s always worth having a portfolio review, especially if you are an experienced investor, to assess whether you are not making the most of tax shelters designed to boost growth and reward you for taking a risk on nascent British companies.”

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