Venture Capital Trusts
Venture Capital Trusts (VCTs) are an opportunity for you to support the growth of small UK businesses and receive attractive tax reliefs in return.
VCTs support smaller companies that may find it hard to get traditional finance, such as from banks. They were introduced by the UK government in 1995 to encourage individuals to invest in this crucial area of the economy. Some 20,000 new jobs have been created by VCT-backed companies. In the 2016/17 tax year alone, over £540 million was raised by VCTs.
By investing in a VCT, you can benefit from the following tax reliefs:
- 30% income tax relief on investments up to £200,000 per tax year (shares must be held for at least five years)
- Tax-free dividends
- Tax-free capital gains
VCT tax reliefs apply to people aged 18 years or over who are UK income taxpayers, and are only available if the trust maintains VCT status. The relief you receive depends on your individual circumstances.
HM Revenue & Customs law and practice can change over time, if you are unsure about your tax status you should seek independent advice from a professional adviser.
For information on how to claim income tax relief on VCTs, please read our guide.