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Today: May 24, 2024
January 4, 2024
1 min read

Venture capital trusts: unraveling investments.

TLDR:

  • A record £1.13bn was invested in VCTs in the 2021/22 tax year and £1.08bn invested in the 2022/2023 tax year.
  • Venture capital trusts (VCTs) help UK investors get access to a portfolio of early-stage businesses.

A record £1.13bn was invested in venture capital trusts (VCTs) in the 2021/22 tax year and £1.08bn invested in the 2022/2023 tax year. The surge in VCT fundraising is driven by the potential for growth and attractive tax incentives. VCTs provide UK investors with access to a portfolio of early-stage businesses, allowing them to diversify their investments and spread the risk. There are three types of VCTs: generalist, specialist, and those that invest in Alternative Investment Market (AIM) listed companies. Investors should select the VCT that best aligns with their investment goals and objectives. VCTs offer valuable tax reliefs, including upfront income tax relief, tax-free dividends, and tax-free capital gains on the sale of VCT shares. However, investing in VCTs carries risks, including value fluctuations and potential losses. The UK government offers tax incentives to encourage investments in innovative sectors. VCTs play a crucial role in supporting the UK’s venture capital success story by driving innovation and supporting job creation.

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