VCTs are listed in the London Stock Exchange and provide finance for small, expanding companies with the aim of generating returns for investors. They’re a tax-efficient way to invest in smaller companies but do involve a high degree of risk and many not be suitable for everyone. Advice should always be sought before investing.
In brief, investors can benefit from:
- Up to 30% income tax relief, if they invest between £5,000 and £200,000 in any tax year (to retain this relief your client will need to keep their VCT shares for at least five years)
- Tax-free dividends
- No capital gains tax