The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
A venture capital trust (VCT) is a quoted company that invests in shares and securities issued by qualifying unquoted trading companies with a permanent establishment in the UK.
A subscription in eligible shares of a qualifying VCT is a tax efficient investment for the individual. He can benefit from the following tax reliefs:
These reliefs are considered in further detail in the Venture capital trusts income tax relief guidance note. The conditions for a valid investment are discussed below.
VCTs are attractive to investors who want to spread their risk by indirectly investing in a number of unquoted companies rather than investing direct in one company, as in the enterprise investment scheme. For more on that scheme, see the Enterprise investment scheme ― introduction guidance note.
Note that a sunset clause for VCT income tax relief has been introduced. This ensures that income tax relief will no longer be given to subscriptions made on or after 6 April 2025, unless the legislation is renewed by Treasury Order.
As tax relief is only available for subscriptions by an individual in ‘eligible’ shares in a ‘qualifying’ VCT, it is important to be clear on the conditions that must be met.
To obtain the income tax relief on investment in a VCT, the investor must meet all the following conditions:
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