Selling your VCT shares
If you’re thinking about selling your VCT shares, you’ll find more information here about the process as well as the documents you need. You’ll also find information on how you can reinvest proceeds into another VCT.
This should not be regarded as investment advice. Octopus can’t offer you financial advice and we strongly recommend talking to a financial adviser before making any investment decisions.
If you have any questions, please call us on 0800 316 2295.
Remember, VCT shares need to be held for the minimum five-year holding period (as set by HM Revenue & Customs) in order to retain the upfront income tax benefits. If we receive a buyback request before your shares are five years old, we won’t hold your shares until they are. We’ll action your request at the next available share buyback.
Selling your VCT shares
If your client is thinking about selling their VCT shares, you’ll find more information here about the process as well as the documents you need. You’ll also find information on how they can reinvest proceeds into another VCT.
If you have any questions, please call us on 0800 316 2067.
Remember, VCT shares need to be held for the minimum five-year holding period (as set by HM Revenue & Customs) in order to retain the upfront income tax benefits. If we receive a buyback request before your client’s shares are five years old, we won’t hold their shares until they are. We’ll action their request at the next available share buyback.
How to sell your VCT shares
There are three ways you can sell your VCT shares:
- Sell the shares back to the VCT through Octopus.
- Sell the shares back to the VCT via our corporate broker.
- Sell them on the secondary market, the same way you would sell any other shares.
Because natural demand for VCT shares is limited on the secondary market, VCTs offer a share buyback facility. This facility allows existing VCT investors to sell their shares back to the VCT at a small discount to the NAV.
The current policy agreed by the Boards for the Octopus VCTs is to buy shares back at a 5% discount to the NAV. Share buybacks are conducted at the Board’s discretion and may be subject to amendment or cancellation, potentially at short notice. We can’t guarantee that shares will always be sold on request.
It’s worth noting, however, that Octopus VCTs have a strong record of buying back shares from investors.
How to sell your client’s VCT shares
There are three ways they can sell their VCT shares:
- Sell the shares back to the VCT through Octopus.
- Sell the shares back to the VCT via our corporate broker.
- Sell them on the secondary market, the same way they would sell any other shares.
Because natural demand for VCT shares is limited on the secondary market, VCTs offer a share buyback facility. This facility allows existing VCT investors to sell their shares back to the VCT at a small discount to the NAV.
The current policy agreed by the Boards for the Octopus VCTs is to buy shares back at a 5% discount to the NAV. Share buybacks are conducted at the Board’s discretion and may be subject to amendment or cancellation, potentially at short notice. We can’t guarantee that shares will always be sold on request.
It’s worth noting, however, that Octopus VCTs have a strong record of buying back shares from investors.
Selling VCT shares through Octopus
The process can be completed in three simple steps (and you only have to do the first one)
Complete the forms
You will need to send us the following items:
– A completed VCT buyback form.
– A completed CREST form (not required if you have Octopus Titan VCT ISA shares). You can find the CREST forms at the bottom of this page.
– Your original valid share certificate (scans are not acceptable, also not required if they hold Octopus Titan VCT ISA).
– Your bank details, along with proof of the account you want the funds to be paid into. We’ll accept a copy of a bank statement or a void cheque
Please send the completed forms to:
Octopus Investments
PO Box 10847
Chelmsford CM99 2BU
Once you have sent us the forms, if there are any dividends before the buyback occurs you will be paid them.
To validate your VCT share certificate please call the VCT’s registrar (Computershare) on 0370 703 6324. Alternatively, you can check online.
We’ll sell the shares for you
A week after receiving the completed forms we’ll send you a letter outlining the next steps and expected time frames for the sale. In addition to the 5% discount charged by the VCT, we take a fee of £25 for this buyback service. We facilitate the buyback with the VCT’s corporate broker on your behalf. This will typically occur at the end of each month within an open period.
Payment
Once we’ve received the funds from the corporate broker, we’ll send out a sale confirmation letter and will make the payment to you via bank transfer (BACS) as per your instruction. If any dividends are paid before the buyback happens you will still receive them.
Upcoming buyback deadlines
We need to receive your completed forms and share certificates by the deadline below for us to action your request. Even when a VCT is closed for share buybacks, we’ll still be accepting applications, so always recommend you submit your request as early as possible. This is to avoid missing out if the dates for the anticipated buyback are revised, for example. You’ll still be entitled to any benefits of the VCT, including tax-free dividends, up until the point your shares are sold.
| VCT | Deadline |
|---|---|
| AIM VCT | 11 May |
| AIM VCT 2 | 11 May |
| Titan VCT | 5 June |
| Apollo VCT | 21 April |
The process typically takes four to eight weeks
During an open period, the process for selling your shares typically takes four to eight weeks. Note that it can take longer if we are not supplied with the correct documentation.
If the VCT is in a closed period, we will hold onto instructions and look to sell the shares as early as possible. They will continue to benefit from tax-free dividends and tax-free growth until the shares are sold back to the VCT.
Please remember that tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its qualifying status.
Why can’t the VCT offer a share buyback immediately?
There may be a number of reasons why a VCT can’t facilitate a share buyback. This could be if the VCT is being revalued, or if there is information in the VCT that is not yet public. For example, as VCTs are publicly traded companies, they need to announce financial results twice a year.
While this is occurring, the VCT is being revalued and is in a ‘closed period’. This ensures that you as an investor are getting the right price for your shares at the point of sale. We can’t proceed with the buyback until a VCT comes out of a closed period, so be aware that buybacks will take longer during these times.
What is the CREST form and why do you need to fill it out?
The CREST form transfers the shares to Octopus so we can sell them back to the VCT on your behalf, (this is not required if you’d like to sell shares in the Octopus Titan VCT ISA).
To help you fill it out, there’s a sample version below, which points out which parts are relevant to you.
What do you need to fill out?
You only need to fill out the sections highlighted below. We’ve also given examples to make it clearer. Please leave all other sections blank. If you need any more guidance, there’s a frequently asked questions guide here.
- Insert name of VCT
- Insert type of share
- Insert number of shares you wish to sell in words
- Insert number of shares you wish to sell in numbers
- Insert the name and address of the shareholder exactly as it appears on your share certificate.*
- Shareholder to sign here
*If you have changed your address since they were issued your share certificate
Please contact the VCT’s registrar, Computershare, on 0370 703 6329, to confirm what address they hold for you. Your new address needs to match the address that the VCT’s registrar (Computershare) has on file for you.
Download buyback forms
If your want to sell your shares through us you will need to download and complete both of the forms and send them to us with your share certificate (CREST form and share certificate not required if they have Octopus Titan VCT ISA shares).
Download CREST form
| VCT | CREST form |
|---|---|
| Titan VCT |  |
| Apollo VCT | |
| Octopus AIM VCT | |
| Octopus AIM 2 VCT | |
Selling VCT shares through a corporate broker
If you want to sell your VCT shares at any time, including during a closed period, you can sell them via our corporate broker. Our corporate broker will explain their process and any necessary fees and charges which are in addition to the 5% discount charged by the VCT.
The process can be completed in three simple steps
Contact the VCT’s corporate broker
Please contact Panmure Gordon on 020 7886 2716. They will talk you through the options.
The broker will sell the shares for you
The broker will discuss the process and any necessary fees and charges. You’ll then need to send the broker relevant documentation they request. The broker will then facilitate the VCT buyback on your behalf.
Payment
The broker will send out a sale confirmation letter and will make the payment to you via bank transfer (BACS) as per your instruction.
Selling your shares through the secondary market
VCT shares trade on the London Stock Exchange, so you can buy or sell them at any time through a stockbroker or a share dealing account.
Be aware though that usually the market price is less than the underlying Net Asset Value (NAV) of the shares, which is the combined value of all the assets owned by the VCT after deducting the value of its liabilities (such as debts and financial obligations).
This is because previously-owned VCT shares do not qualify for the 30% upfront income tax relief. As a result, selling shares directly into the market can produce a poor result. This is why investors usually prefer to sell their shares back to the VCT directly or via the corporate broker.
Selling VCT shares through Octopus
The process can be completed in three simple steps (you and your client only have to do the first one)
Complete the forms
You will need to send us the following items:
– a completed VCT buyback form.
– A completed CREST form (not required if your client has Octopus Titan VCT ISA shares). You can find the CREST forms at the bottom of this page.
– Your client’s original valid share certificate (scans are not acceptable, also not required if they hold Octopus Titan VCT ISA).
– Your client’s bank details, along with proof of the account they want the funds to be paid into. We’ll accept a copy of a bank statement or a void cheque.
Please send the completed forms to:
Octopus Investments
PO Box 10847
Chelmsford CM99 2BU
To validate your client’s VCT share certificate please call the VCT’s registrar (Computershare) on 0370 703 6324. Alternatively, you can check online.
We’ll sell the shares for your client
A week after receiving the completed forms we’ll send your client a letter outlining the next steps and expected time frames for the sale. In addition to the 5% discount charged by the VCT, we take a fee of £25 for this buyback service. We facilitate the buyback with the VCT’s corporate broker on your client’s behalf. This will typically occur at the end of each month within an open period.
Payment
Once we’ve received the funds from the corporate broker, we’ll send out a sale confirmation letter and will make the payment to your client via bank transfer (BACS) as per their instruction. If any dividends are paid before the buyback happens they will still receive them.
Upcoming buyback deadlines
We need to receive your client’s completed forms and share certificates by the deadline below for us to action their request. Even when a VCT is closed for share buybacks, we’ll still be accepting applications, so always recommend you submit requests as early as possible. This is to avoid missing out if the dates for the anticipated buyback are revised, for example. Your client will still be entitled to any benefits of the VCT, including tax-free dividends, up until the point their shares are sold.
| VCT | Deadline |
|---|---|
| AIM VCT | 11 May |
| AIM VCT 2 | 11 May |
| Titan VCT | 5 June |
| Apollo VCT | 21 April |
The process typically takes four to eight weeks
During an open period, the process for selling your client’s shares typically takes four to eight weeks. Note that it can take longer if we are not supplied with the correct documentation.
If the VCT is in a closed period, we will hold onto instructions and look to sell the shares as early as possible. They will continue to benefit from tax-free dividends and tax-free growth until the shares are sold back to the VCT.
Please remember that tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its qualifying status.
Why can’t the VCT offer a share buyback immediately?
There may be a number of reasons why a VCT can’t facilitate a share buyback. This could be if the VCT is being revalued, or if there is information in the VCT that is not yet public. For example, as VCTs are publicly traded companies, they need to announce financial results twice a year.
While this is occurring, the VCT is being revalued and is in a ‘closed period’. This ensures that your investor is getting the right price for their shares at the point of sale. We can’t proceed with the buyback until a VCT comes out of a closed period, so be aware that buybacks will take longer during these times.
What is the CREST form and why do you need to fill it out?
The CREST form transfers the shares to Octopus so we can sell them back to the VCT on your client’s behalf, (this is not required if you’d like to sell shares in the Octopus Titan VCT ISA).
To help you fill it out, there’s a sample version below, which points out which parts are relevant to your client.
What do you need to fill out?
You only need to fill out the sections highlighted below. We’ve also given examples to make it clearer. Please leave all other sections blank. If you need any more guidance, there’s a frequently asked questions guide here.
- Insert name of VCT
- Insert type of share
- Insert number of shares your client wishes to sell in words
- Insert number of shares your client wishes to sell in numbers
- Insert the name and address of your client exactly as it appears on their share certificate.*
- Shareholder to sign here
*If your client has changed their address since they were issued their share certificate
Please contact the VCT’s registrar, Computershare, on 0370 703 6329, to confirm what address they hold for your client. Their new address needs to match the address that the VCT’s registrar (Computershare) has on file for them.
Download buyback forms
If your client wants to sell their shares through us they (or you) will need to download and complete both of the forms and send them to us with their share certificate (CREST form and share certificate not required if they have Octopus Titan VCT ISA shares).
Selling VCT shares through a corporate broker
If they want to sell their VCT shares at any time, including during a closed period, they can sell them via our corporate broker. Our corporate broker will explain their process and any necessary fees and charges which are in addition to the 5% discount charged by the VCT.
The process can be completed in three simple steps
Contact the VCT’s corporate broker
Please contact Panmure Gordon on 020 7886 2716. They will talk you through the options.
The broker will sell the shares for your client
The broker will discuss the process and any necessary fees and charges. You’ll then need to send the broker relevant documentation they request. The broker will then facilitate the VCT buyback on your client’s behalf.
Payment
The broker will send out a sale confirmation letter and will make the payment to your client via bank transfer (BACS) as per their instruction.
Selling your client’s shares through the secondary market
VCT shares trade on the London Stock Exchange, so you can buy or sell them at any time through a stockbroker or a share dealing account.
Be aware though that usually the market price is less than the underlying Net Asset Value (NAV) of the shares, which is the combined value of all the assets owned by the VCT after deducting the value of its liabilities (such as debts and financial obligations).
This is because previously-owned VCT shares do not qualify for the 30% upfront income tax relief. As a result, selling shares directly into the market can produce a poor result. This is why investors usually prefer to sell their shares back to the VCT directly or via the corporate broker.