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Supporting the next generation of British businesses

Many companies that started off with venture capital trust (VCT) funding have become household names in their own right. Some have listed on the London Stock Exchange, while others have been sold to global brands, such as Microsoft and Twitter, delivering excellent returns for VCT investors. And of course, VCTs offer several tax incentives to help compensate investors for the risk they take with their money.

Some risks to keep in mind

Investing in a VCT puts your client’s capital at risk. Shares in VCTs should be considered higher risk and may be harder to sell than those listed on the main market of the London Stock Exchange. Tax treatment depends on individual circumstances and may change in the future, and tax reliefs depend on the VCT maintaining its qualifying status. You’ll find more detail on the risks in the ‘What risks should your clients be aware of’ section of this page, as well as on the VCT pages we link to below.

What is a venture capital trust?

Take a look at our client-friendly guide to venture capital trusts, and watch this video. Please bear in mind the risks above.

Octopus Titan VCT

The UK’s largest VCT invests in entrepreneurial early-stage companies with the potential for high growth. Currently open to new investment.

Remember, capital is at risk and tax treatment cannot be guaranteed. You’ll find more about risks below.

Find out more

Octopus AIM VCTs

Two VCTs featuring established portfolios of around 75 AIM-listed companies with growth potential. Currently open to new investment.
 
Remember, capital is at risk and tax treatment cannot be guaranteed. You’ll find more about risks below.

Find out more

Octopus Apollo VCT

A portfolio of around 25 established smaller companies which targets regular tax-free dividends for investors. Currently closed to new investment.
 
Remember, capital is at risk and tax treatment cannot be guaranteed. You’ll find more about risks below.

Find out more
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Get in touch with your local Business Development Manager to see:

Why invest in a VCT?

Growth potential
VCTs can offer an attractive way to gain exposure to smaller companies that are not listed on the main market of the London Stock Exchange. However, investing in VCT-qualifying companies means VCTs are high-risk investments, and investors may not get back the full amount they invest.

Tax incentives
When investors purchase new VCT shares, they’re entitled to claim a number of tax incentives on investments up to £200,000 each year:

  • Up to 30% income tax relief on the amount invested: For a £10,000 VCT investment, £3,000 can be taken off the investor’s income tax bill – provided shares are held for at least five years and the amount of income tax claimed doesn’t exceed the amount of income tax due.
  • Tax-free capital gains: If VCT shares are sold for a profit, the proceeds won’t be liable for capital gains tax.
  • Tax-free dividends: VCT dividends don’t need to be declared on a tax return.

Investors should read our handy guide to claiming income tax on their VCT shares.

Diversification
Smaller companies often follow a different investment cycle from other parts of the market, so VCTs can help to add useful diversification to an overall investment portfolio.

Supporting British innovation
Investing in a VCT means helping innovative, fast-growing smaller companies to create jobs, prosperity and economic growth.

Complementing other investments
A VCT can be a useful option for investors looking to complement existing pension plans or other long-term investments, such as ISAs.

Additional income
Tax-free VCT dividends can provide an attractive supplementary income, especially for investors approaching or in retirement.

What risks should your clients be aware of?

Investors’ capital is at risk and investors could lose money
The value of an investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

A VCT is a long-term investment
Investors should be prepared to hold shares for a minimum of five years. If they decide to sell their shares before then, they will be required to repay to HM Revenue & Customs any upfront income tax relief they’ve claimed.

A VCT should be considered a high-risk investment
VCTs invests in the shares of companies that are not listed on the main market of the London Stock Exchange. Such investments can fall or rise in value much more sharply than shares in larger, more established companies. They can also take longer and be more difficult to sell. If your clients aren’t comfortable with the risks involved with unlisted companies, this investment may not be right for them.

Shares may be difficult to sell
There isn’t an active market for VCT shares in the way there is for shares in big companies like BP and Vodafone. This means that if an investor decides to sell their VCT shares, they may not be able to find a buyer, or they may have to accept a price lower than the net asset value of the investment.

Tax rules can change
Rates of tax, tax benefits and tax allowances do change. In addition, the tax benefits available to investors through this investment depend on an investor’s own personal circumstances. To ensure VCT money continues to support Government policy objectives, HM Treasury can also change the definition of a VCT-qualifying investment in the future. This could impact the nature of new investments a VCT can make over time.

The VCT’s qualifying status could end
If a VCT loses its qualifying status, tax advantages – such as tax-free dividends and exemption from capital gains tax – may be withdrawn from that point. If this happens within five years of an initial investment, investors may be asked to repay any upfront income tax relief that they have already claimed.

Octopus VCT 3 shareholder information

Octopus VCT 3 plc aims to provide investors with tax-efficient access to a portfolio of companies with growth potential, targeting a tax-free dividend stream, through a combination of regular and special dividend payments. Octopus VCT 3 is now closed for new investment.

Follow this link to view the latest Octopus VCT 3 announcements and share prices from the London Stock Exchange

London Stock Exchange code: OCV3
Registrars: Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
Tel: 0370 703 6329 (Many home phone tariffs now include free calls to 0370 numbers. If you do not get inclusive calls, or are calling at a time of day when calls are charged for, the total call cost is usually a combination of a call set-up fee and a per-minute rate which from a BT landline is 10p per minute)
Auditors: James Cowper Kreston
Registered in England: No. 07744056
Registered office: 33 Holborn, London, EC1N 2HT

Latest AGM Results
Latest AGM results document

Latest annual report
Octopus VCT 3 annual report 28 February 2018

Latest interim report

Octopus VCT 3 interim report 31 August 2017

Latest Circular
Octopus VCT 3 and Octopus VCT 4 Circular July 2017

Octopus VCT 4 shareholder information

Octopus VCT 4 plc aims to provide investors with tax-efficient access to a portfolio of companies with growth potential, targeting a tax-free dividend stream, through a combination of regular and special dividend payments. Octopus VCT 4 is now closed for new investment.

Follow this link to view the latest Octopus VCT 4 announcements and share prices from the London Stock Exchange

London Stock Exchange code: OCV4
Registrars: Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
Tel: 0370 703 6330 (Many home phone tariffs now include free calls to 0370 numbers. If you do not get inclusive calls, or are calling at a time of day when calls are charged for, the total call cost is usually a combination of a call set-up fee and a per-minute rate which from a BT landline is 10p per minute)
Auditors: James Cowper Kreston
Registered in England: No. 07743878
Registered office: 33 Holborn, London, EC1N 2HT

Latest AGM Results
Latest AGM results document

Latest annual report
Octopus VCT 4 annual report 28 February 2018

Latest interim report

Octopus VCT 4 interim report 31 August 2017

Latest Circular
Octopus VCT 3 and Octopus VCT 4 Circular July 2017

Octopus VCT 3 pricing and dividend information

Dividend information is being retrieved...

Octopus VCT 4 pricing and dividend information

Dividend information is being retrieved...

Please read

Nothing on this page constitutes investment, tax or legal advice. Personal opinions may change and should not be seen as advice or a recommendation. VCTs may not be suitable for everyone, so we recommend investors speak to a financial adviser, and read the relevant brochure, before deciding whether to invest. These documents are available on this site.

This advertisement is not a prospectus and investors should only subscribe for shares on the basis of information contained in the VCT’s prospectus and Key Information Document, which are available on this site. Any recommendation should be based on a holistic review of your client’s financial situation, objectives and needs.

Be aware of VCT share scams run by third parties who claim to be connected with us in some way. Visit our boiler room scams: warning to investors page for more information.