There’s more to VCTs than the obvious tax benefits and they could suit more clients than you might think. Octopus Investments’ Paul Latham highlights three client financial planning scenarios where VCTs can offer suitable solutions

Many advisers are aware of Venture Capital Trusts (VCTs) as an investment suitable for certain clients who are keen to invest in smaller companies while also receiving tax benefits for their investment.

A VCT investment incentivises the support of early[1]stage companies by offering a range of tax benefits to compensate for some of the risks of smaller company investing. As a listed company that invests in a diversified portfolio of smaller unlisted companies, a VCT offers upfront income tax relief of 30% on investments up to £200,000 each year, provided the investment is held for five years. And there’s no tax to pay on any dividends received.

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