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Venture Capital Trusts
Venture Capital Trusts (VCTs) enable investors to invest indirectly in a range of small, higher-risk trading companies whose shares and securities are not listed on a mainstream stock exchange.
The Government offers investors a range of upfront and long-term tax benefits when investing in VCTs (new shares):
- upfront income tax relief of 30%, on up to £200,000 invested per tax year if the shares are retained for five years
- tax-free dividends
- tax-free capital gains, when you sell your shares
Hargreave Hale manages two VCTs which both invest in the Alternative Investment Market (AIM) index, an exchange on which smaller companies’ shares are traded.
The Hargreave Hale AIM VCT 1 and the Hargreave Hale AIM VCT 2 are both managed by Giles Hargreave and his investment management team; Oliver Bedford, Guy Feld, George Finlay and Richard Hallett.
Venture Capital Trusts and Enterprise Invesment Schemes invest in smaller companies. Shares of smaller companies carry higher risks as there can be liquidity issues, smaller management, and shorter trading histories. Shares in smaller companies are also more sensitive to price movements. Due to the greater risks involved in smaller company investments, investors have the potential to receive greater rewards.
Tax benefits depend on individual circumstances and may be subject to future tax rule changes (2010/11).