What is Venture Capital Trust (VCT)?

Full Definition

A Venture Capital Trust (VCT) is a listed investment company that pools investors' money to back small, higher-risk unquoted trading companies, with generous tax incentives to compensate for the risk. For 2026/27 you can invest up to £200,000 per tax year and claim 30% Income Tax relief — so a £10,000 investment can cut your tax bill by £3,000 — provided you hold the shares for at least five years. Dividends from VCTs are tax-free and fall outside the £500 dividend allowance, and any growth is exempt from Capital Gains Tax. Unlike EIS, a VCT does not offer CGT deferral, but it spreads risk across a managed portfolio rather than a single company. The relief can only offset tax you actually owe, so VCTs mainly suit higher earners who have already used their ISA and pension allowances.

Related Calculators

See Also