About VCTs

Venture Capital Trusts (VCTs) offer investors the opportunity to gain access to fast growing, privately owned smaller companies. They were introduced by the Government in 1995 as a means of boosting investment in the UK’s smaller companies market and have attractive tax-related benefits. Subject to holding VCT shares for a minimum period of 5 years, these tax benefits currently are:

 

• 30% income tax relief which reduces the effective cost of investment to 70p for each 100p initially invested
• Tax free dividends
• No capital gains tax on the sale of VCT shares by an investor

 

Please ensure that you read the risks applicable to Venture Capital Trust Funds before considering investment in a VCT.

Acuity Capital has 2 VCTs which invest alongside each other providing £2 million to £8 million of equity finance for management buy-outs and development capital for smaller UK companies.

 

 

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 further increase risk.