For advisers, while VCTs are often a go-to for tax relief, their value also extends to offering clients access to early-stage and growing companies.
As the government seeks to unlock opportunities in high-growth sectors like deep tech, healthcare, and cleantech, VCTs can serve as a bridge for investors looking to gain early exposure to these themes, helping both investors and the economy realize their growth potential.
Access to innovation With IPO activity subdued, many businesses are staying private longer, causing investors to miss out on early-stage growth opportunities in some remarkable companies.
For those seeking alternative ways to tap into the next generation of companies, directly backing individual start-ups can be challenging, requiring time, connections, capital, and confidence.
VCTs offer an alternative by providing access to a diversified portfolio of high-growth companies that are otherwise difficult to invest in directly.
By spreading risk across multiple companies, VCTs offer growth potential while aiming to reduce the volatility typically associated with early-stage investments. Combined with their tax benefits, this makes VCTs an appealing option for those seeking to invest in promising sectors.
For advisers with interested clients, VCTs can be accessed with a minimum investment of as little as £5,000. However, it’s important to note that securing the available tax relief requires holding the investment for at least five years—a time frame that allows for the growth of the underlying companies.
