FAQs: Venture Capital Trusts

With the Triple Point Venture VCT now open for investment, we’ve put together a quick refresher on Venture Capital Trusts (VCTs).

What is a VCT?

A Venture Capital Trust (VCT) is a type of listed company that allows individual investors to back young, ambitious UK businesses. Introduced by the government in 1995, VCTs were designed to support private sector growth by giving private investors access to early-stage UK companies that create jobs, drive innovation, and support economic growth.

Why have VCTs become so popular?

VCT fundraising has been strong over the years, reflecting their appeal as both a tax-efficient investment and a vital source of growth capital for UK companies. The record was set in 2021/22, when VCTs raised £1.13 billion, followed by £1.08 billion in 2022/23. In the last two tax years, fundraising amounts were £873 million (2023/24) and £895 million (2024/25) respectively.1 In total, VCTs have raised £4.6 billion over the last five years. This works out at an average of just over £930 million a year, underlining the consistent demand for VCTs among investors and their role in supporting UK growth businesses.

How is a VCT structured?

All VCTs are public limited companies, with shares traded on the London Stock Exchange. When you invest, you own shares in the VCT itself rather than directly in the underlying companies. Investors share in the overall success of the portfolio.

Like other listed companies, VCTs hold Annual General Meetings where shareholders can vote on decisions. Each VCT has an independent board of directors, must publish an annual report, and is subject to independent audits.

What tax benefits do VCTs offer?

Because early-stage companies are higher risk, the government offers tax reliefs to encourage investment:

• Up to 30% upfront income tax relief, claimed through your Self-Assessment return or tax code adjustment

• Tax-free dividends paid by the VCT (although dividends are not guaranteed)

• Tax-free growth, with no capital gains tax when selling your shares

How much can I invest in a VCT?

The minimum investment is usually around £3,000. There’s no upper limit on how much you can invest, but income tax relief only applies to the first £200,000 per tax year. This means the maximum income tax that can be claimed is £60,000, and you can only claim income tax relief on the amount of income tax you’ve paid in that year. To keep the relief, you must hold the VCT shares for at least five years.

Can VCT shares by sold easily?

VCTs are listed on the main market of the London Stock Exchange, but they can be difficult to sell because trading volumes are low. This is mainly because second-hand VCT shares are not eligible for upfront income tax relief. Most investors rely on share buyback programmes run by the VCT to provide liquidity, although these are at the discretion of the VCT’s Board and are not guaranteed. Shares that are bought back are typically sold at a discount to their net asset value.

Who are VCTs suitable for?

VCTs are attractive to investors who are comfortable with higher-risk investment opportunities and want to combine tax efficiency with the chance to support innovative UK businesses. They may particularly appeal to higher and additional-rate taxpayers looking to reduce their income tax bill, generate tax-free dividends, and diversify their existing portfolios beyond mainstream investments.

For more information about the Triple Point Venture VCT, click here or call us on 020 7201 8990.

Important information

This article is an advertisement for the purposes of the Prospectus Regulation Rules and is not the prospectus. The Triple Point Venture VCT invests in smaller companies, which can involve a higher degree of risk than investing in companies listed on an exchange. Investors’ capital is at risk and there is no guarantee that target returns will be achieved. Past performance and forecasts are not a reliable indicator of future performance. Tax treatment depends on the individual circumstances of each client and is subject to change. Tax reliefs depend on the VCT maintaining its qualifying status. Investors should only subscribe for shares on the basis of information contained in the Prospectus which is available via the Triple Point website. This article has been approved by Triple Point Administration LLP, which is authorised and regulated by the Financial Conduct Authority.

[1] https://ifamagazine.com/aic-2024-2025-vct-fundraising-is-third-highest-on-record/