Venture Capital Trusts (VCTs)

Venture Capital Trusts are fully listed companies and their shares are traded on the London Stock Exchange.  Nevertheless it is often difficult to re-sell VCT shares because, whilst they are listed, the market in them is commonly illiquid as there tend to be few buyers.  They are similar in structure to Investment Trusts.  Primarily, they invest in small unquoted companies, or those listed on Aim, London Stock Exchange's market for growth companies, that engage in qualifying trades in the UK.  The qualifying rules make a number of exclusions including property, financial services and commodities.

Investors are able to claim 30% income tax relief on an investment into a VCT up to an annual limit of £200,000.  In addition, any dividends paid by the fund are tax-free and if held for five years any uplift in the value of the shares is also tax-free.

VCT website

‘www.Taxsolved.co.uk', provides an online VCT information service for private investors and financial advisers to access research and reviews for current issues as well as past performance data on historic funds. There are also attractive discounts available on subscription to selected funds and investors can download PDF copies of each prospectus as well as requesting hard copies by mail. For further information please go to www.taxsolved.co.uk.