Venture Capital Trusts This month we explore Venture Capital Trusts.

23.05.2018

Venture Capital Trusts

Venture Capital Trusts, VCTs, are investment companies set up to invest in small UK businesses.  During this time, they have raised as much as £6.5 Billion for these smaller companies. To encourage investment in these small businesses the Government offers generous tax benefits to investors in VCTs.

VCTs invest in small or newly formed companies that are either not yet quoted on the London Stock Exchange or are listed on AIM. AIM, the Alternative Investment Market, is the London Stock Exchange’s international market for smaller growing companies. Obviously, businesses in this sector require investment to develop and VCTs can provide some of the investment needed to enable the companies to reach their potential. They can potentially give you a high return, but they can also be much riskier than larger, more established companies.

Investors in VCTs can receive an income tax credit of 30% when buying shares in a new VCT share offer. There is also on income tax to pay on dividends from VCT shares. Investors in VCTs aren’t liable for Capital Gains Tax on the sale of VCT shares either. Further information on the tax structure of VCTs can be obtained by speaking to a financial adviser.

Over the last 20 years, VCTs have undoubtedly helped smaller UK companies to grow and household names such as FatFace and Zoopla have benefitted from VCT investments. The growth of smaller and start-up companies benefitting from VCT investments has created jobs and capital expenditure that has helped all of the UK economy. In these times of economic uncertainty, and in the years to come, VCTs definitely have a part to play in providing the necessary finance to provide the growth this country needs.

If you would like to know more about the investment opportunities afforded by VCTs please contact In2 Planning on:

T: 020 7336 7763

E: philip@in2planning.co.uk