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 invest in a basket of small companies. This is riskier than investing in established ones, but can offer significant rewards. Not only might you invest in tomorrow’s Google, but you 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 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 £542 million in the 2016/2017 tax year – the second-highest level ever recorded.
Remember, tax rules can change and tax benefits depend on individual circumstances.
How to invest in VCTs
To invest in a VCT, first download and read carefully the VCT application pack. Then complete the application form and return it to Wealth Club with your cheque payable to the VCT provider. With some VCTs you can apply online for a faster and more convenient way to invest.
You will receive your share certificate once the VCT issues new shares; this may be only once or twice per tax year. The prospectus 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 here.