Venture Capital Trusts

A Venture Capital Trust (VCT) is a listed investment company that invests in a portfolio of smaller, typically higher-risk UK businesses. VCTs were introduced to encourage investment into these companies, with eligible investors able to benefit from a range of tax reliefs.

For a more detailed introduction, read our Guide to VCTs, available in the Guides & Resources page of the Hub.

Individuals who subscribe for new VCT shares may be able to take advantage of a number of tax benefits, including:

• Income tax relief of 20% on the initial investment, providing shares are held for a minimum of 5 years (subscription made prior to 6 April 2026 received 30% relief)
• No capital gains tax on the disposal of VCT shares
• Capital gains on underlying investments can be paid out as tax free dividends

Tax relief is only available to UK tax payers, on amounts invested up to a maximum of £200,000 per person, per tax year, and is restricted to the amount which reduces the investor’s income tax liability to nil.

VCTs may be considered for clients looking at additional ways to invest tax-efficiently as part of their wider financial planning. This could include those who have made use of other tax allowances, have surplus income or capital to invest, or are looking to diversify an existing portfolio.

As VCTs are higher-risk, long-term investments, a client’s individual circumstances, objectives, investment horizon and capacity for loss will all be important considerations.

Our client scenarios look at a range of illustrative circumstances and show how VCTs could be considered as part of wider financial planning. Each scenario looks at a different set of circumstances, planning objectives and considerations. You can view our VCT client scenarios in the Client Scenarios page of the Hub.

Tax rules and the wider financial planning landscape continue to evolve. We regularly share insights on relevant changes and what they could mean for advisers and their clients, alongside webinars with industry experts exploring key developments in more detail.

Visit our Guides & Resources and Webinars pages to see the latest content.

If you have a question that isn’t covered here, our team would be happy to help. Use the Ask the team button on the left to get in touch with one of our experts.

For broader enquiries, you can contact our Investor Relations team using the details in the section below.

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