Venture Capital Trust (VCT)

A Venture Capital Trust (VCT) is an investment vehicle that uses investor money to help fund early-stage companies. The VCT managers then help support the growth of these new and often innovative firms.

VCT investments are very high risk due to the nature of the underlying companies which are small and in the early stages of their development. Yet a VCT investment can be useful for individual investors when used in the right situation as part of a holistic financial plan. Professional financial advice should always be sought before entering into such arrangements.

For investors, VCTs offer:

• Potential for capital growth.
• Supporting innovative companies and wider UK economic growth.
• Income tax relief based on the sum invested (maximums apply).
• Shares are free of Capital Gains Tax on disposal.
• Shares may pay a tax free dividend.

You should not invest in a VCT purely due to its tax treatment. Tax reliefs depend on the VCT maintaining its VCT-qualifying status, and the tax benefits available to you will depend on your own personal circumstances and can change. The value of a VCT investment, and any income from it, can fall as well as rise. You may not get back the full amount you invest and shares may be difficult to sell. Minimum holding periods apply.