Around £570m of VCT shares were issued in the 2016/17 financial year according to HMRC figures, a 28% increase on the year before and the highest amount raised since 2005/06.
Restrictions on higher earners’ savings are thought to be behind the rise, with the vehicles seen as a tax-efficient alternative to pension plans.
Alex Davies, chief executive and founder of the Wealth Club, said several popular offers are already 75% subscribed within weeks of opening.
“I would encourage investors planning to use VCTs to invest now ahead of the fast approaching November Budget which could see changes to the tax relief they provide.
“There has arguably never been a better time for investors to consider VCTs and there are compelling reasons for investors to act now rather than wait until after the Budget when the rules may well change,” he said.
Demand has risen in spite of a fall in the number of VCTs raising funds, HMRC figures revealed.
In 2014/15 there were 57 VCT raising funds, 45 the following year and just 38 in 2016/17.
Paul Latham, managing director of one of the UK’s largest VCT providers, Octopus Investments, said the boom marked a need for people planning for retirement to diversify their portfolios.
He added: “With a number of VCTs already fundraising we expect appetite among investors to increase further this year. The UK entrepreneurial scene is thriving and the investment opportunity for those looking to access the growth potential of early stage businesses is huge.”
Since their introduction in 1995, VCTs have raised about £7bn.
