The government has launched a consultation on changing the Individual Savings Account (ISA) rules to expand the range eligible to be held in a stocks and shares ISA and qualify for tax reliefs.

Under the proposals, company shares traded on a wider range of equity markets will be eligible for a stocks and shares ISA, including markets with a component of smaller company shares.

In addition, shares on the UK's junior ISA market will continue to earn an inheritance tax exemption after being held for two years, and qualify for inclusion in existing tax-friendly vehicles such as venture capital trusts (VCTs) and enterprise investment schemes.

Economic secretary to the Treasury, Sajid Javid, said: 'Access to finance for smaller growing companies is key to promoting private investment and delivering a sustainable economic recovery. The Government wants to ensure that businesses, particularly small businesses, are able to access finance and support, and this change has the potential to help provide that access while offering consumers greater choice in what they can hold in their ISA. '

The proposal was first outlined in the 2012 Autumn Statement to encourage more investment in growing businesses.

The government expects to publish draft regulations by summer 2013.

The closing date for the consultation is 8 May 2013.