Investors are being urged to take advantage of Venture Capital Trusts (VCT) to benefit from the tax relief available on them.

According to Fair Investment Company, rules on VCT investments may change in April, making them a riskier proposition.

Currrently, VCTs, which were introduced in 1995 to encourage people to invest in small companies, offer 30 per cent tax relief on investments up to £200,000 a year.

Nick Scarrett, head of investment and pension services at Fair Investment Company, believes there is still very little understanding of the products.

He said: They can be a good option for many investors because they offer a combination of potentially high dividend yields and great tax breaks, which is why we are really pleased to be able to offer this new service.

The Association of Investment Companies recently predicted that VCTs would see a surge this year particularly because of the rise in the top rate of income tax.

Martin Churchill, editor of Tax Efficient Review, said that he expected a rise in demand by around 70 per cent compared to last year.