Venture Capital Trusts (VCTs) are a type of investment company that invests in small, high-risk trading companies. In return for the high risk, the government offers generous tax reliefs to investors.

VCTs are listed companies on the London Stock Exchange that you can invest in, similar to an investment trust. They provide a way to invest in a portfolio of unquoted, entrepreneurial companies.

What are the tax reliefs?

Investing in new VCT shares comes with a powerful set of tax breaks:

Income Tax Relief: You can claim income tax relief of 30% on the amount you invest, up to an annual investment limit of £200,000.
Tax-Free Dividends: Any dividends you receive from your VCT shares are completely tax-free.
Capital Gains Tax Exemption: When you sell your VCT shares, any profit you make is exempt from Capital Gains Tax.

To keep the reliefs, you must hold the shares for at least five years. You claim the income tax relief on your Self Assessment tax return.

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