The View Point Inn

Business Views From The Professionals

Home Page

July 17th, 2014

Check on this before investing in Venture Capital Trusts

VCT'sVenture Capital Trusts (VCTs) serve as the engine of growth in the UK’s economy. The government supports them by providing valuable tax incentives aimed at attracting investors. Such small business investments require a great deal of experience and special skills so for more information make sure to visit


Benefits accrued to venture capital investors include;

Capital gains tax reliefs

Investors are not required to pay any capital gain tax on any gain they make whenever they dispose their venture capital trust share. They are capable of enjoying capital gains exemption for both second hand shares and newly issued shares.

Income tax reliefs

Ordinary shares are exempted from tax whenever there is a dividend relief. As a result, income tax relief at 30 per cent is available for all ordinary shares. This is accrued to the dividends investors get from the investment of their shares.

There are three types of venture capital trust markets. They include:

Generalist Venture Capital Trusts

It is the best in accessing a long stream of dividends. Investors have an opportunity to invest in a wide range of companies in different sectors and stages of investment. They are therefore less risky as compared to other forms of investments. Having a broad portfolio is important in the current uncertain economic environment.

Limited life

They are also referred to as planned exit VCTs. They are expected to wind up after about five years and pay returns to their investors. Some people consider them as the less risky because they offer an exit point. This does not necessarily mean that the investors will have been paid all their dividends at the time of exit. When a company is liquidated and it has not made enough profits the investors do not gain.


They are different from the generalist VCT’s since they focus on one investment rather than a diversified portfolio. They are highly risky to invest in. However, when the investment is profitable, they are able to make very potential returns to the investors.

There is a specialist accountant who are authorised to give out free advice. If you feel you need more information on this subject then check this out before investing large sums of money.

With this basic information on the types of VCT’s investors should find it easier making the right decision on which VCT to bank on.

Irwin Schiff’s Secrets of Living an Income Tax-Free Life