Interactive Investor

Venture Capital Trusts (VCTs)

Learn more about investing in VCTs with interactive investor.

What are VCTs?

Venture Capital Trusts (VCTs) started life in 1995. They were launched to encourage investment in early stage companies by offering attractive tax breaks to investors, in the form of 30% initial tax relief for investments up to £200,000 a year and tax-free dividends. 

VCTs invest in young entrepreneurial companies that are unquoted, with a relatively recent rule change requiring VCTs to invest in businesses that are typically less than seven years old. As such, these underlying investments carry considerably higher risk than do listed businesses on the London Stock Exchange. In return for taking that risk, VCT shareholders get a variety of generous tax breaks.

VCTs advantages and disadvantages

Benefits and risks associated with VCTs investing 

VCTs are highly tax-efficient, offering 30% income tax relief as long as the shares are held for five years, plus tax-free dividends and no capital gains tax on profits on the disposal of VCT shares. Investors can put up to £200,000 into VCTs each year. 

VCTs attract high earners (who should also be sophisticated investors) with few other options: they have reached their limits for pension contributions and used up their dividend tax allowance. As a general rule of thumb, if you pay 40% or 45% tax and have maxed out your pension and ISA, then VCTs are worth considering.  

The tax incentives are attractive, but it is important to remember the tax tail should never wag the investment dog. Performance overall has been creditable for VCTs, albeit some way behind mainstream equity markets. Over 10 years, the average generalist VCT has produced a share price total return of 123% (as at 17 July 2020), according to the Association of Investment Companies. This compares with 149% for the average UK all-companies investment trust. 

Over the past couple of years, VCTs have become riskier propositions as they are now required to invest in earlier-stage companies, mainly those that have been trading for less than seven years. In addition, the investable universe for VCTs has become more limited, with management buyouts excluded and investments in asset-backed firms restricted. One the one hand investing in younger businesses could lead to high returns, but at the same time risk is increased. 

It is important to point out that VCTs are complex products and are only suitable for sophisticated investors. Please ensure you understand the risks involved. If you are unsure about the suitability of any investment please seek financial advice.

Advantages

  • Investors can receive income tax relief of 30% on up to £200,000 invested in newly issued shares held for at least five years
  • Dividends paid out by VCTs are tax-free
  •  All capital gains on sale of shares are also tax-free

Disadvantages 

  • The underlying investments in VCTs are high-risk and have become riskier over the past couple of years, due to rule changes 
  • Charges levied by VCT provider tend to be high – around 1.75% to 2% a year is typical. In contrast funds and investment trusts tend to cost 0.85% to 1% a year. 
  • Tax benefits for VCT investors could at some point be taken away or changed 

Types of VCTs

Generalist VCTs

These VCTs invest in a wide range of companies in different sectors and stages of development.

AIM VCTs

As the name suggests they only invest in companies listed, or about to become listed, on the Alternative Investment Market (AIM).

Specialist VCTs 

Tend to focus their investment expertise on one particular sector, e.g. Healthcare.

Limited Life VCTs

 Set out on a 5+ year plan and will wind up the VCT at the end of this period.

VCTs Tax Rules and Benefits

Venture capital trusts (VCTs) are collective funds that take stakes in small companies that investors would generally regard as high-risk. VCT investors get a variety of generous tax breaks in return for committing their cash to those high-risk investments. These include:  

  • upfront income tax relief of 30% on investments of up to £200,000 in new VCT shares
  • tax-free dividends 
  • tax-free capital growth 

Are VCTs right for me?

Investors should feel comfortable that they meet the following criteria:

  • High net worth and sophisticated investors who are UK residents.
  • Investors who have a sufficient income tax liability to reclaim income tax relief at 30% of the amount subscribed.
  • Investors who have realised a capital gain that would attract Capital Gains Tax.
  • Investors who will not need access to their capital for at least five years and are comfortable with higher risk investments.

Why choose ii?

  • We charge a market-leading one-off fee of £30 (inc VAT) to process your VCT application.
  • Most VCT Managers offer broker discounts, which we will reinvest fully for you in new shares.
  • Unlike some brokers we credit all the trail income we receive from your VCT investments as cash in your account.

Current VCTs Offers

Here we list current VCT offers available for investment through interactive investor. Before investing, please ensure you have read and understood the key documents and 'how to apply through ii' information below.

Albion VCTs Offering

Legal name(s)Albion Development VCT plc (AADV)
Albion Enterprise VCT plc (AAEV)
Albion Technology & General VCT plc (AATG)
Crown Place VCT plc (CRWN)
King’s Arms Yard VCT plc (KAY)
TypeGeneralist
Minimum investment£5,000
Amount raising£60m (£14.5m for AADV, £15.75m for AAEV, £11.75m for AATG, £7.5m for CRWN and £10.5m for KAY)
Initial charge3%
Total discount via ii0.5% (1.0% for existing shareholders) until first £10m raised. 0% thereafter.
Net initial charge2.5% (2.0% for existing shareholders) until first £10m raised. 3.0% thereafter.

Important note: Crown Place VCT is fully subscribed and closed to further applications.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Baronsmead VCTs Offering

Legal name(s)Baronsmead Venture Trust plc
Baronsmead Second Venture Trust plc
TypeGeneralist
Minimum investment£5,000
Amount raising£30m, with a £20m over-allotment facility
Initial charge4.5%
Total discount via ii2.0% (2.25% for existing shareholders) until first £7.5m raised per Company or until 8 January 2024, whichever is soonest. 1.5% thereafter.
Net initial charge2.5% (2.25% for existing shareholders) until first £7.5m raised per Company or until 8 January 2024, whichever is soonest. 3.0% thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Blackfinch Spring VCT Offering

Legal name(s)Blackfinch Spring VCT plc
TypeGeneralist
Minimum investment£3,000
Amount raising£20m with £10m over-allotment facility
Initial charge5.5%
Total discount via ii4.5% (5.5% for existing Blackfinch investors) until 26 January 2024. Then 4.0% (5.0% for existing Blackfinch investors) if you apply before 3 April 2024. 3.0% (4.0% for existing Blackfinch investors) thereafter.
Net initial charge1.0% (0% for existing Blackfinch investors) until 26 January 2024. Then 1.5% (0.5% for existing Blackfinch investors) if you apply before 3 April 2024. 2.5% (1.5% for existing Blackfinch investors) thereafter.

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Foresight Technology FWT Shares Offering

Legal name(s)Foresight Technology VCT plc
FWT shares of 1p each in the Company ("FWT Shares")
TypeGeneralist
Minimum investment£3,000
Amount raising£15m with £10m over-allotment facility
Initial charge5.5%
Total discount via ii4.0% (4.5% for existing Foresight VCT shareholders) until 1 December 2023. 3.0% (3.5% for existing Foresight VCT shareholders) thereafter.
Net initial charge1.5% (1.0% for existing Foresight VCT shareholders) until 1 December 2023. 2.5% (2.0% for existing Blackfinch investors) thereafter.

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Guinness VCT Offering

Legal name(s)Guinness VCT plc
TypeGeneralist
Minimum investment£5,000
Amount raising£10m with £5m over-allotment facility
Initial charge5.5%
Total discount via ii3.5% (4.5% for existing Guinness investors) until 31 January 2024. 2.5% (3.5% for existing Guinness investors) thereafter.
Net initial charge2.0% (1.0% for existing Guinness investors) until 31 January 2024. 3.0% (2.0% for existing Guinness investors) thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Maven VCTs Offering

Legal name(s)Maven Income & Growth VCT 1 plc
Maven Income & Growth VCT 3 plc
Maven Income & Growth VCT 4 plc
Maven Income & Growth VCT 5 plc
TypeGeneralist
Minimum investment£5,000
Amount raising£30m (£7.5m in each Company) with a £10m over-allotment facility (£2.5m in each Company)
Initial charge5.5%
Total discount via ii4.25% (4.5% for existing investors) until 31 January 2024. 3.0% thereafter.
Net initial charge1.25% (1.0% for existing investors) until 31 January 2024. 2.5% thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Molten Ventures VCT Offering

Legal name(s)Molten Ventures VCT plc
(formerly Draper Esprit VCT)
TypeGeneralist
Minimum investment£6,000
Amount raising£20m, with a £20m over-allotment facility
Initial charge5.5%
Total discount via ii3.75% until 31 October 2023. 3.5% until 30 November 2023. 3.25% until 31 December 2023. 3.0% until 31 January 202. 2.75% until 28 February 2024. 2.5% thereafter.
Net initial charge1.75% until 31 October 2023. 2.0% until 30 November 2023. 2.25% until 31 December 2023. 2.50% until 31 January 202. 2.75% until 28 February 2024. 3.0% thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Octopus Apollo VCT Offering

Legal name(s)Octopus Apollo VCT plc
TypeGeneralist
Minimum investment£5,000
Amount raising£35m with £15m over-allotment facility
Initial charge5.5%
Total discount via ii2.5% (3.5% for existing Octopus VCT investors).
Net initial charge3.0% (2.0% for existing Octopus VCT investors).

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Octopus Future Generations VCT Offering

Legal name(s)Octopus Future Generations VCT plc
TypeGeneralist
Minimum investment£3,000
Amount raising£15m with £5m over-allotment facility
Initial charge3.0%
Total discount via ii1.0% for existing Octopus VCT investors
Net initial charge3.0% (2.0% for existing Octopus VCT investors)

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Octopus Titan VCT Offering

Legal name(s)Octopus Titan VCT plc
TypeGeneralist
Minimum investment£3,000
Amount raising£125m with £75m over-allotment facility
Initial charge5.5%
Total discount via ii4.5% (5.5% for existing Octopus VCT investors) until 21 December 2023. 2.5% (3.5% for existing Octopus VCT investors) thereafter.
Net initial charge1.0% (0% for existing Octopus VCT investors) until 21 December 2023. 3.0% (2.0% for existing Octopus VCT investors) thereafter.

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Pembroke VCT Offering

Legal name(s)Pembroke VCT plc
TypeGeneralist
Minimum investment£5,000
Amount raising£40m, with a £20m over-allotment facility
Initial charge5.0%
Total discount via ii2.5% for new investors and 3.0% for existing Pembroke VCT investors until first £5m raised for each or until 31 December 2023, whichever is soonest. 2.0% thereafter.
Net initial charge2.5% for new investors and 2.0% for existing Pembroke VCT investors until first £5m raised for each or until 31 December 2023, whichever is soonest. 3.0% thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

ProVen VCTs Offering

Legal name(s)ProVen VCT plc
ProVen Growth & Income VCT plc
TypeGeneralist
Minimum investment£5,000
Amount raising£30m (up to £15m per Company) with a £10m over-allotment facility (up to £5m per Company)
Initial charge5.5%
Total discount via ii3.0% (3.5% for existing shareholders) until first £5m raised per Company or until 16 February 2024, whichever is soonest. 2.5% thereafter.
Net initial charge2.5% (2.0% for existing shareholders) until first £5m raised per Company or until 16 February 2024, whichever is soonest. 3.0% thereafter.

How to apply: This Offer's application process is online only via a service provided by the Company's receiving agent and registrar, The City Partnership (UK) Ltd. To apply through us please follow the 'Online application form' process outlined below.

Seneca Growth Capital VCT Offering

Legal name(s)Seneca Growth Capital VCT Plc
TypeGeneralist
Minimum investment£3,000
Amount raising£10m with £10m over-allotment facility
Initial charge5.5%
Total discount via ii3.5% (4.0% for existing shareholders and existing Seneca investors) until 31 October 2023. 2.5% thereafter.
Net initial charge2.0% (1.5% for existing shareholders and existing Seneca investors) until 31 October 2023. 3.0% thereafter.

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

Triple Point Venture VCT Offering

Legal name(s)Triple Point Venture VCT plc
TypeGeneralist
Minimum investment£3,000
Amount raising£10m with £20m over-allotment facility
Initial charge5.5%
Total discount via ii4.0% (5.0% for existing Triple Point investors) until first £5m raised or until 31 December 2023, whichever is soonest. 3.0% thereafter.
Net initial charge1.5% (0.5% for existing Triple Point investors) until first £5m raised or until 31 December 2023, whichever is soonest. 2.5% thereafter.

How to apply: This Offer's application process requires you to follow the ‘Paper application form’ steps outlined in the ‘How to apply through interactive investor’ section below.

How to apply through interactive investor

VCTs FAQs

New to interactive investor?

Open a Trading account to invest in Venture Captial Trusts. VCTs are classified as a Complex Instrument so you will need to complete our online appropriateness assessment once you have opened your account.

Already an ii customer?

As VCTs are classified as a Complex Instrument you must first complete our online appropriateness assessment, which can be found when you log in to your Trading Account.