Venture Capital Trusts
Help small companies grow, save income tax and receive tax-free dividends
A Venture Capital Trust (VCT) is a publicly listed company run by a fund manager. It aims to make money by investing in small, unquoted, entrepreneurial companies and helping them grow.
When you as a private investor buy shares in a VCT you get access to a basket of small companies. These are riskier than established ones but can offer significant rewards. Not only might you invest in a rising star, but you could also receive valuable benefits along the way:
- Up to 30% tax relief – save up to £60,000 on your income tax bill when you invest in newly issued VCT shares
- Tax-free dividends – a record £395 million paid in 2016/17 alone
- Tax-free growth
- Generous allowance – invest up to £200,000 per tax year
- No need to declare dividends on your tax return
- Save on VCT initial charges and in many cases get an annual rebate for three years when you invest via Wealth Club
VCTs are currently the only investments that offer tax breaks both when you put the money in and when you receive an income.
Indeed, they are becoming increasingly popular with investors, especially those with a large income tax liability or who are seeking to generate a tax-efficient income.
VCTs raised £728 million in the 2017/2018 tax year – the second-highest level ever recorded, and the most since income tax relief was set to 30%.
Remember, tax rules can change and tax benefits depend on circumstances.
How to invest in VCTs
To invest in a VCT, first download and read carefully the provider documents, including the VCT's Key Information Document. Then complete the application form and return it to Wealth Club with your cheque payable to the VCT provider. With most VCTs you can apply online for a faster and more convenient way to invest.
You will receive your share certificate shortly after the VCT issues new shares; this may be only once or twice per tax year. The provider documents will contain further details. Be sure to understand the risks and commitments before you invest.
View our featured offers below, or browse all current VCT offers.