Could this be the best year to invest in VCTs? 30% tax relief, tax-free dividends, potentially more mature and proven companies
The new tax year will bring rule changes affecting VCT investment.
The most notable – the one that’s had everybody up in arms – is the reduction of the current offer of up to 30% income tax relief, down to 20% from 6 April.
Meanwhile, as counterbalance to the cut in tax relief, from 6 April VCTs will be able to invest in larger companies and potentially continue supporting their best performers for longer. With time, this might help make portfolios more resilient and somewhat mitigate the risks of early-stage investing.
The long-term impact of these changes remains to be seen. In the short term, there is an opportunity.
If you are considering investing in VCTs, these last few weeks before the end of the tax year could be the best time to do so. You could still receive the higher rate of income tax relief (30%) – a tax break worth up to £60,000 if using the full £200k VCT allowance – and tax-free dividends (dividends are variable and not guaranteed). In addition, longer term you could benefit from a potentially more mature and resilient portfolio.
Investors appear to be taking notice: since the Budget, VCTs have raised £310 million, 37% more than the average for the same period in the last five tax years (February 2026).
Tax rules can change and benefits depend on circumstances. This is a brief outline based on current rules: there are detailed conditions and rules you should consider carefully before investing. Decisions should be based on the investment merit, not the tax reliefs alone.
Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest. Tax rules can change and benefits depend on circumstances.
Invest up to £200k, save up to £60k – but only until 5 April 2026
A Venture Capital Trust (VCT) is a company listed on the London Stock Exchange that in turn invests in young, innovative, usually privately-owned companies. It is akin to an investment trust but invests in smaller and younger, therefore riskier, companies.
The government offers generous tax breaks to encourage investment into dynamic British enterprise. This is bearing fruit as many experienced investors include VCTs in their tax-planning – in the last tax year (2024/25) investment reached nearly £900 million, the third-highest VCT fundraising total on record.
When you invest, you could currently receive:
- Up to 30% income tax relief – save up to £60,000 on your income tax bill when you invest in newly issued VCT shares (but the rate of tax relief is reducing to 20% from 6 April 2026)
- Tax-free dividends – no need to declare VCT dividends on your tax return and they won’t use up your dividend allowance, which is currently £500 (note, dividends are variable and not guaranteed)
- Tax-free growth – no CGT on gains
You must have sufficient income tax liability to offset, and the shares must be held for at least five years. Tax rules can change and benefits depend on circumstances.
Budget changes at a glance: increasing support for scale-up companies
In the Budget, the Chancellor also introduced measures intended to extend the support available to companies that are scaling up.
The changes are around three areas:
- Gross assets test: this is essentially a proxy for company size. To be able to receive VCT investment, a company needs to have gross assets – this includes all forms of property that appear on a company’s balance sheet – under a certain threshold, before and after allotting shares.
- Annual investment limit: this is a cap on the amount of VCT funding a company can receive in a year.
- Lifetime investment limit: this is a cap on the amount of VCT funding a company can receive ever.
The remaining VCT qualifying rules – e.g. to do with company age, number of employees, etc. – remain unchanged.
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Annual investment limit |
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Featured
Below we list our ‘Featured Offers’; marked with a gold ‘W’, are the current offers we consider to have the most investment merit – this is not personal advice and you should form your own view.
Help young and ambitious companies grow and receive up to 20% income tax relief, tax-free dividends and tax-free growth. Tax rules can change and benefits depend on circumstances; dividends are not guaranteed.
= Featured Offer
| VCT name | Target dividend | Wealth Club initial saving | Net initial charge | Annual rebate | Funds raised / sought | Minimum investment | Next deadline | Invest now |
|---|---|---|---|---|---|---|---|---|
Baronsmead VCTsAmongst the longest-standing and most diverse VCTs with exposure to private and AIM companies Find out more |
7% of NAV
|
1.5%
|
3.0%
|
0.15%
|
£38.5m / £50m
77% full
Overallotting
|
£5,000
|
12 May 2026 (noon) for 2026/27
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Maven VCTsLong established VCTs managed by one of the largest investment teams in the VCT sector, and diversified portfolio of 100+ private and AIM-quoted regional companies Find out more |
6% of NAV
|
3%
|
2.5%
|
0.10%
|
£43.3m / £50m
86% full
Overallotting
|
£5,000
|
24 Apr 2026 (5pm) for 2026/27
|
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Pembroke VCTVCT seeking to back young companies developing brands in the consumer, technology and business services sectors Find out more |
5p per share
|
2%
|
3%
|
0.10%
|
£40m / £45m
88% full
Overallotting
|
£5,000
|
24 Jun 2026 (noon) for 2026/27
|
|
ProVen VCTsEstablished VCTs with a track record of investing in growth capital companies, particularly e-commerce. Find out more |
5% of NAV
|
2.5%
|
3%
|
0.10%
|
£20.6m / £40m
Overallotting
|
£5,000
|
30 Apr 2026 (5pm) for 2026/27
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| View ALL Venture Capital Trusts OFFERS | ||||||||
Help young and ambitious companies grow and receive up to 20% income tax relief, tax-free dividends and tax-free growth. Tax rules can change and benefits depend on circumstances; dividends are not guaranteed.
= Featured Offer
| VCT name | Target dividend | Wealth Club initial saving | Net initial charge | Annual rebate | Funds raised / sought | Minimum investment | Next deadline | Invest now |
|---|---|---|---|---|---|---|---|---|
Baronsmead VCTsAmongst the longest-standing and most diverse VCTs with exposure to private and AIM companies Find out more |
7% of NAV
|
1.5%
|
3.0%
|
0.15%
|
£38.5m / £50m
77% full
Overallotting
|
£5,000
|
12 May 2026 (noon) for 2026/27
|
|
Maven VCTsLong established VCTs managed by one of the largest investment teams in the VCT sector, and diversified portfolio of 100+ private and AIM-quoted regional companies Find out more |
6% of NAV
|
3%
|
2.5%
|
0.10%
|
£43.3m / £50m
86% full
Overallotting
|
£5,000
|
24 Apr 2026 (5pm) for 2026/27
|
|
Pembroke VCTVCT seeking to back young companies developing brands in the consumer, technology and business services sectors Find out more |
5p per share
|
2%
|
3%
|
0.10%
|
£40m / £45m
88% full
Overallotting
|
£5,000
|
24 Jun 2026 (noon) for 2026/27
|
|
ProVen VCTsEstablished VCTs with a track record of investing in growth capital companies, particularly e-commerce. Find out more |
5% of NAV
|
2.5%
|
3%
|
0.10%
|
£20.6m / £40m
Overallotting
|
£5,000
|
30 Apr 2026 (5pm) for 2026/27
|
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| View ALL Venture Capital Trusts OFFERS | ||||||||
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy, sell or hold any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
Alex Davies
Chief Executive
Alex was a board director at Hargreaves Lansdown, where he worked for 15 years. He was responsible for building Hargreaves Lansdown into the biggest direct-to-consumer SIPP provider in the UK with more than 150,000 clients and over £12 billion under management. He is a keen investor with a portfolio of shares, funds, student property, EIS and VCT investments.