What are the Rules around VCTs?
VCT rules allow you to benefit from tax breaks when you invest in them. Upon investment of up to £200,000, you are eligible for 30% income tax relief, and you also benefit from tax free dividend income and capital gains. There are a number of VCT rules, some of which are in place to protect you, the investor. VCT rules include:
- You can invest a maximum of £200,000 per tax year
- Income tax is repayable if you sell in the first 5 years
- Minimum investments apply (usually £3,000 or £5,000)
- Managers must invest at least 70% of proceeds within 3 years
- Only genuinely small companies with assets less than £15million before issue are eligible
- Companies must have no more than 250 full time employees at the time of investment
- No more than £2million may be raised via VCTs in the 12 months ending on the date of the relevant investment
- The company's shares should not be listed on a recognised stock exchange
- Certain sectors are excluded, such as nursing homes, hotels, and banking
If the VCT rules match you investment criteria, see below for a range of the VCTs available and click for more information and to find out how to apply:
These VCTs typically invest in unquoted companies in the hope of making a profit when the company is sold or floated.