VCTs have been part of the investment landscape since 1995. A VCT is a public limited company (plc), and its shares are listed on the London Stock Exchange. A VCT investor buys and own shares in the VCT itself, not the underlying companies within the VCT portfolio, although their shares mean they participate in the successes and failures of the VCT portfolio overall.

VCTs were introduced as a government-approved way to encourage more investment into unlisted early-stage companies, the “backbone” of the UK economy. These companies make a difference by creating jobs, boosting economic growth, and often become successful through world-class innovation.

VCT investors are eligible for the following tax reliefs:

• Up to 30% upfront income tax relief on the amount they invest
• Tax-free growth on the value of their VCT investment
• Any dividends paid by the VCT are also tax-free

Clients can invest up to £200,000 in VCTs per tax year, and can therefore claim income tax relief of up to £60,000, depending on the value of their investment. Clients cannot claim more income tax relief that they owe.

Clients who claim income tax relief on their VCT shares must hold them for at least five years. Tax reliefs are dependent on your personal circumstances, and the rules can change.