Venture Capital Trusts (VCT's)
An investment vehicle to gain exposure to small, high risk companies
Venture Capital Trusts are collective investments managed by a fund manager. They invest in small, high risk
companies whose stocks and shares are not listed on any recognised stock exchange.
How do you invest
Venture Capital Trusts (VCT's) are normally funds which form part of the portfolio of funds of a
larger investment company. As an investor you will be able to buy shares in the VCT through the fund
manager. Before making the investment ensure you establish whether the VCT is a qualifying fund for tax
reliefs. The fund manager will use your investment to invest in small companies. The manager will,
once he feels it is appropriate, divest investments with the aim to realise a profit and make new investments.
Through profitable divestments your shares will grow in value.
Tax reliefs available
The government would like to encourage such investments as they value the contribution made to the
economy by small companies. To that end they do give generous tax reliefs both on income tax and capital gains
It is worth pointing out you can only qualify for these tax reliefs as an individual investor.
They do not extent to trustees or companies making such investments.
Such reliefs include,
- Income tax
Income tax on VCT's ordinary shares dividends is exempt - you pay no income tax on dividend income you
may, or may not, enjoy from your VCT ordinary shares investment.
- Capital gains tax
When disposing of your VCT shares you may not have to pay any capital gains tax on any gain you may have
The tax relief rules are quite complex for VCT investments and therefore very important you
take financial advice before making such investments.
We have a thorough understanding of VCT's investments here at All Counties Financial Ltd. We are happy to bear the cost of your initial
consultation giving you the chance to ask us questions on these high risk investments.
Call 0800 634 4846 to arrange your initial consultation