What to consider when researching a VCT
If your client could benefit from investing in a VCT, here are some key things to bear in mind when doing your research
Jessica Franks
Head of tax
Venture Capital Trusts have become an important part of many clients’ portfolios. Where clients use their full Isa allowance and are restricted in making pension contributions, VCTs offer a complementary way to invest for the future tax-efficiently.
VCTs are listed investment companies that support innovation in the UK by encouraging patient investment in early-stage unquoted or AIM-listed companies. Because the smaller companies a VCT invests in can struggle in their early years, and some will not be successful at all, VCTs offer tax reliefs to compensate for some of the investment risk.