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CHARTERED TAX ADVISERS BUSINESS DEVELOPMENT CONSULTANTS
Home > > VCT and EIS > Venture Capital Trusts (VCTs)
A Venture Capital Trust (VCT) is an investment company broadly similar to an investment trust. It will be quoted on the stock market and will have to invest at least 70% of its assets in companies that would qualify under the EIS, and must distribute most of its income by way of dividend. It must be able to demonstrate a spread of investments: none can account for more than 15% of the value of its portfolio.
Individuals who subscribe for new ordinary shares in VCTs up to £200,000 per tax year, qualify for 30% income tax relief, provided the shares are held for at least five years (three years if the shares were issued before 6 April 2006). In addition, any dividend received by individuals aged at least eighteen in respect of ordinary shares in a VCT is exempt from income tax.
Gains accruing to individuals aged at least eighteen on the disposal of ordinary shares in VCTs are not chargeable gains, but equally, no capital gains tax relief is available for losses.
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Eacotts Chartered Accountants and Chartered Tax Advisers
Servicing the Thames Valley, Berkshire, Buckinghamshire and the UK
This document is for guidance only and professional advice should be sought before acting on the information contained. No responsibility will be accepted by Eacotts for loss occasioned as a result of action taken, or refrained from, in consequence of the contents
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