Venture Capital Trusts

A Venture Capital Trust (VCT) is a publicly listed company run by a fund manager. It aims to make money by investing in small, unquoted, entrepreneurial companies and helping them grow. When you as a private investor buy shares in a VCT you get access to a basket of small companies. These are riskier than established ones but can offer significant rewards. Not only might you invest in a rising star, but you could also receive valuable benefits along the way
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HIGHLIGHTS

  • Up to 30% tax relief – save up to £60,000 on your income tax bill when you invest in newly issued VCT shares

  • Tax-free dividends – a record £398 million paid in 2017/18 alone

  • Tax-free growth

  • Generous allowance – invest up to £200,000 per tax year

  • No need to declare dividends on your tax return

  • Save with BestPrics FS lower commission rates and benefit from just a 1.5% advice fee contributions.

Benefits of AIM VCT

All the benefits of standard VCT’s with the addition of it being AIM in which is detailed below.

  • Benefits of AIM VCTs Access to “Larger” Smaller Companies:

  • AIM-listed companies are small, but by no means minnows. Companies listed on AIM have an average market cap of £98.9m.

  • As at December 2018, the companies in the VCT portfolio (excluding FTSE 100 companies held for liquidity management) had an average market cap of £92.6m, average annual turnover of £30.7m per annum and average pre-tax profit if £0.7m per annum. Price and Portfolio Transparency:

  • Because AIM stocks are listed on an official exchange, their share prices are marked to market on a daily basis, as opposed to the predominantly unquoted investments held by generalist VCTs, which are typically only valued and reported on a quarterly basis at best. Potential for Growth:

  • Smaller quoted companies are historically proven to deliver superior total returns over the long term.

  • Smaller companies tend to be under-researched compared to their larger counterparts. This creates opportunities for experienced investment managers that specialise in smaller companies, such as Unicorn, which has a strong track record in finding value in AIM stocks.

Tax Rules Comparison

  ELS VCT BR

Liquidity

3 years to qualify for tax relief however exit targets are usually 5+ years

AIM = Daily, Unquoted subject to company buy back

AIM = Daily typically 3 months from notice, but at managers discretion

Loss Relief

Yes

No

NO

IHT Relief

Yes

No

NO

Tax free growth

Yes

No

No(unless ISA)

Tax free dividend

Yes

No

No(unless ISA)

Income tax relief

Yes-Subject to minimum holding period

Yes

No

CTG Deferral

Yes - Up to £1,000,000.00

No

NO

Featured VCT offers from BestPriceFS

Name Comments Target Dividend Initial Charge Initial Saving with Best Price FS Net Initial Charge Advised Funds
Raised/Sought
Deadline Invest Now

Pembroke VCT

Pembrok More >

3p per share

3.50%

2.00%

1.50%

Yes

9.3million/20million

Sun-Apr-20

Details and Application Pack

Unicorn AIM

Unicorn More >

?

5.50%

4.00%

1.50%

Yes

11.5 million / 15.0 million

Sun-Apr-20

Details and Application Pack

Important Notice

This website is directed exclusively at, and intended to be used only by, persons in the UK who will be required to self-certify as Sophisticated Investors or High Net Worth Individuals before applying to invest in any of the products featured.

The investment products in this section of the website are not for everyone. They are generally higher risk and require a longer investment term. You may get back less than you invest. It is therefore important that you understand the risks and commitments of these products.

We’ve made every effort to ensure the accuracy of the material on this website, but cannot guarantee its accuracy or currency. It reflects our understanding of current product and tax rules, which may change in future. It is for general information only and should not be regarded as constituting an offer or a solicitation to buy or sell any securities, or as investment or tax advice.

If you are in any doubt as to the suitability of the products for your circumstances, please contact us directly for advice.

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