Venture Capital Trusts
Invest in a diverse portfolio of early-stage businesses and claim attractive tax reliefs.
What are Venture Capital Trusts?
The UK has a rich ecosystem of early-stage businesses with growth potential. But without funding and specialist support, many might never get off the ground.
A Venture Capital Trust (VCT) is a company that buys small stakes in a large number of early-stage companies. The VCT can hold these companies for many years and support their growth, adding new investments over time.
You might have heard of many of the companies Octopus has backed, such as Cazoo, Secret Escapes, Zoopla, or Graze.
Of course, not every smaller company will be a success story. That’s why VCT investors can claim tax reliefs, which encourage investment in early-stage businesses.
Watch our short video which explains:
- What a VCT is
- How VCTs work
- The benefits and risks of investing
An introduction to Venture Capital Trusts – Runtime 4:19
What are Venture Capital Trusts?
The UK has a rich ecosystem of early-stage businesses with growth potential. But without funding and specialist support, many might never get off the ground.
A Venture Capital Trust (VCT) is a company that buys small stakes in a large number of early-stage companies. The VCT can hold these companies for many years and support their growth, adding new investments over time.
You might have heard of many of the companies Octopus has backed, such as Cazoo, Secret Escapes, Zoopla, or Graze.
Of course, not every smaller company will be a success story. That’s why VCT investors can claim tax reliefs, which encourage investment in early-stage businesses.
Watch our short video which explains:
- What a VCT is
- How VCTs work
- The benefits and risks of investing
An introduction to Venture Capital Trusts – Runtime 4:19
Reasons to invest
Income tax relief
Investors can claim upfront income tax relief equal to 30% of their investment on the first £200,000 each tax year.
Tax free dividends
The tax-free dividends paid by a VCT can provide a supplementary income, which could be useful, especially if investors are approaching or in retirement.
Supporting Uk businesses
Investing in a VCT means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.
Portfolio diversification
VCTs can diversify an investor’s portfolio by giving them access to companies they may not otherwise hold.
Risks to bear in mind
Capital at risk
The value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
Volatility and liquidity
VCT shares could fall or rise in value more than other shares. They may also be harder to sell.
Qualification status
Tax reliefs depend on a VCT maintaining its VCT-qualifying status.
Tax treatment
Tax treatment depends on individual circumstances and tax legislation may change in the future.
VCTs from Octopus
Octopus Future Generations VCT
Octopus Titan VCT
Octopus Apollo VCT
Octopus AIM VCTs
Resources and guides
Guide to Venture Capital Trusts
Learn how VCTs work, the types of companies they invest in, and the benefits and risks of investing in a VCT.
Guide to claiming income tax relief
This guide explains how you can claim tax relief on a VCT investment.
Reasons to invest
Income tax relief
Investors can claim upfront income tax relief equal to 30% of their investment on the first £200,000 each tax year.
Tax free dividends
The tax-free dividends paid by a VCT can provide a supplementary income, which could be useful, especially if investors are approaching or in retirement.
Supporting UK businesses
Investing in a VCT means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.
Portfolio diversification
VCTs can diversify an investor’s portfolio by giving them access to companies they may not otherwise hold.
Risks to bear in mind
Capital at risk
The value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
Volatility and liquidity
VCT shares could fall or rise in value more than other shares. They may also be harder to sell.
Qualification status
Tax reliefs depend on a VCT maintaining its VCT-qualifying status.
Tax treatment
Tax treatment depends on individual circumstances and tax legislation may change in the future.
VCTs from Octopus
Octopus Future Generations VCT
Octopus Titan VCT
Octopus Apollo VCT
Octopus AIM VCTs
Resources and guides
Guide to Venture Capital Trusts
Learn how VCTs work, the types of companies they invest in, and the benefits and risks of investing in a VCT.
Have a client in mind?
Want to understand how VCTs could benefit your clients? Browse our client scenarios.
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