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. The government is keen for experienced investors
to invest in this kind of company because they typically create jobs and support
economic growth. However, investing in small businesses is risky. To help
compensate for this, the government offers generous tax benefits:
- 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 £398 million paid in 2017/18 alone
- Tax-free growth
- Generous allowance – invest up to £200,000 per tax year
- No need to declare dividends on your tax return.
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, especially with experienced investors with a large income tax liability or who are seeking to generate a tax-efficient income.
VCTs raised £731 million in the 2018-2019 tax year – the highest amount since income tax relief was set to 30%.
Remember, tax rules can change and tax benefits depend on circumstances.
How to invest in VCTs
First, please download and read carefully the provider documents, including the VCT's Key Information Document.
The quickest and most convenient way to apply is online. Wealth Club was the first service to offer online VCT applications and you can currently apply online for most offers.
Alternatively, you can download the application form and return it completed to Wealth Club.
Most VCTs offer the option to pay by cheque or bank transfer.
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.