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Venture Capital Trusts (VCTs)

Venture Capital Trusts (VCTs) are a well–established investment scheme first introduced by the Government in 1995 to provide a source of financing for small UK businesses. Although some of the features have changed over time, VCTs continue to enjoy the support of the Government.

A VCT is a special type of stock exchange listed company that invests in small UK businesses that are themselves either unquoted or traded on AIM, the London Stock Exchange’s market for growth companies. Because the Government regards these types of businesses as critical to the growth and dynamism of the UK economy, it provides VCTs with tax benefits to incentivise investment into this area.

A VCT might invest in between 20 and 70 of these businesses, depending on how long the VCT has been going and how mature the portfolio is. While most of the VCT’s portfolio must be invested in qualifying investments that meet the strict criteria to make them eligible for VCT backing, VCTs will also typically hold up to 30% in non-qualifying investments which might include cash, bonds, funds or shares in listed companies.

VIEW OUR CURRENT VCT OFFERS

Having researched and monitored every VCT ever launched, see what VCTs are currently available through us and how well we rate them.

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HOW TO INVEST IN VCTs

You can apply to invest in a VCT through us once you have read all the important information. This page has everything you need to know about the process.

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VCT TAX RULES

With generous tax credits, on-going tax relief, tax-free dividends and Capital Gains payable, Venture Capital Trusts are incredibly tax-efficient.

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THE DIFFERENT TYPES OF VCT

VCTs can use different investment strategies and there are three common types of VCT. Discover what they are here.

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WHAT ARE THE RISKS?

VCTs are higher risk investments and are not suitable for everybody. Ensure you know what considerations need to be made before investing.

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VCT PERFORMANCE TABLES

VCTs are held long-term and invest into some of the most exciting, fledgling companies based in the UK and their performance can vary greatly.

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VCT INVESTMENT CRITERIA

Because they receive considerable tax benefits, VCTs operate with strict investment criteria. Find out more about the companies they can invest in.

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BENEFITS OF INVESTING IN VCTs

  • Generous 30% tax credit (on new investments up to £200,000 per tax year)
  • Tax-free dividends
  • No need to declare dividends with HMRC
  • No capital gains tax payable
  • Invest from just £3,000

WHY USE BESTINVEST?

We have researched and monitored every VCT ever launched.

  • Market leading discounts
  • The most comprehensive research and ratings to help you decide
  • Alerts to keep you informed on new launches and discounts
  • Ongoing performance and net asset value data

VCTs should be regarded as higher risk investments.

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance is not an indication of future performance.

VCTs are only suitable for UK resident taxpayers who can tolerate higher risk and have a time horizon of greater than five years. Historical or current yields should not be considered a reliable indicator of future returns, which cannot be guaranteed. Share values and income from them may go down as well as up and you may not get back the amount originally invested. Owing to the nature of their underlying assets, VCTs are highly illiquid. Investors should be aware that they may have difficulty, or be unable to realise their shares at levels close to that that reflect the value of the underlying assets. Tax levels and reliefs may change, and the availability of tax reliefs will depend on individual circumstances. You should only subscribe for new VCT shares on the basis of the relevant prospectus and must carefully consider the risk warnings contained in that prospectus.

We aim to provide investors with information to help them make their own investment decisions although this should not be construed as advice or an investment recommendation. If you are unsure about the suitability of an investment or if you need advice on your specific requirements, we strongly suggest that you consider professional financial advice.

OUR AWARDS

Past performance is not a reliable indicator of future returns

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

Issued by Bestinvest (Brokers) Limited (Reg. No. 2830297), which is authorised and regulated by the Financial Conduct Authority. Financial services are provided by Bestinvest (Brokers) Limited and other companies in the Tilney Bestinvest Group, further details of which are available here. This site is for UK investors only.
© Tilney Bestinvest Group Ltd 2016.

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