Who should consider investing in a VCT?

Investors should only invest in a VCT if they understand the nature and risks inherent in such an investment and, if appropriate, have sought professional advice and determined a suitable level of investment. 
 
VCTs are particularly suitable for investors who:
* Are higher rate taxpayers that are prepared to allocate an appropriate proportion of their portfolios in higher risk investments.

* Are prepared to accept a higher than average risk than on other collective investments in return for potentially higher rewards after tax.

* Are wanting to invest money from maturing Business Expansion Schemes (BESs).

* Have already used up their ISA allowances or are investing the maximum allowed in their pension plans.
 
Risks

Private investors should always seek advice from a Professional Adviser when considering investment in a VCT.  When considering investment in a VCT, the FSA expects IFAs to provide their clients with information which can help explain the particular risks of VCTs to ensure they get a balanced view of investments in such funds. Should you have any queries with regards to VCTs or wish to discuss a typical VCT investor profile, please do not hesitate to contact us.
 
Investors should be aware that an investment in a VCT carries a higher risk than many other forms of investment.  In addition the value of an investment in a VCT may go down as well as up and investors may not get back the full amount invested, even after taking into account the available tax reliefs.  VCTs usually trade at a discount to their NAV.  It may be difficult to exit VCTs and they should be considered as long term investments.  If a VCT does not raise sufficient funds to reach critical mass, then it may be difficult for it to achieve a spread of investment which could increase risk.