Venture capital trusts (VCTs) were introduced by the government in 1995 to encourage investment in smaller unquoted companies. They provide a valuable source of capital for small companies and helps them to develop and grow.
A VCT is a company, run by a fund manager, which invests in other companies that are not quoted on a stock exchange but may be listed on the Alternative Investment Market (AIM).
VCTs themselves are listed on the London Stock Exchange, with strict limits laid down by HM Revenue – Customs (HMRC) on what they can invest in.
There are considerable tax advantages offered to investors in new VCTs. However, they are complex products which carry a certain level of risk. VCTs should be considered as long-term investments and it is important that you understand the risks as well as the benefits before .
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