Venture Capital Trust (VCT)

A Venture Capital Trusts (VCT) is an investment fund that invests in small and early stage businesses. These funds are also usually listed on the London Stock Exchange.

When you invest in a VCT fund you can receive 30% Income Tax relief plus tax-free dividends.

If you want to claim this tax relief, you need to file a Self Assessment tax return (you’ll also need your VCT tax certificate and share certificates).

VCTs are considered to be one of the most tax efficient investments currently available in the UK. Other tax efficient schemes include the Enterprise Investment Schemes, Seed Enterprise Investment Schemes and Peer to Peer Lending. To learn more about tax efficient investment schemes, visit our dedicated glossary page.

Frequently Asked Questions

  • What does ‘tax-efficient’ mean?

    You have tax obligations, but there is a chance that you are paying higher rates of tax than you need to, based on assumptions that HMRC may make from your income and expected revenue. To ensure that your accounts are running in the most tax-efficient way possible, contact our experts for a comprehensive consultation!

  • How do I pay tax on my dividends?

    Your method of paying tax on your dividends is dependent on the amount you earn in dividends that year:

    • If you earn between £1,000 and £10,000, you can either do a Self Assessment tax return or pay through your PAYE tax code
    • If you earn over £10,000 from dividends, you have to file a Self Assessment tax return

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