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Diversifying a portfolio

Tax planning strategies to help your clients build a more diverse portfolio while making use of available tax reliefs.

Helping clients who want to broaden their investment portfolio

Experienced investors may be interested in diversifying their portfolio by making a medium- to long-term investment that also has tax benefits.

Venture Capital Trusts (VCTs) and Enterprise Investment Scheme (EIS) investments back early-stage companies, which can bring something different to a client’s portfolio. Investors can claim certain tax reliefs which act as an incentive to take on the risk of investing in smaller companies. Read more about the risks.

Let’s look more closely at planning ideas for clients who want to diversify their portfolios.

Planning ideas for clients

ISA investors


Clients who’ve built up large ISAs and have an inheritance tax liability can be reluctant to sell down their ISA investments for estate planning.


Clients can hold certain shares in an ISA that qualify for inheritance tax relief. They could move some or all their ISAs into an inheritance tax-efficient portfolio.


Octopus AIM Inheritance Tax ISA

Looking for high growth


Clients with a broad investment portfolio and high annual income may want to invest in high growth opportunities.


Clients can make a tax-efficient investment that targets high growth by investing in smaller companies. Investors can claim valuable tax reliefs in return for the risk they take by investing.


Enterprise Investment Scheme (EIS)

Risks to keep in mind

Capital is at risk

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.

Tax relief can’t be guaranteed

Tax treatment depends on individual circumstances and tax rules could change in the future. Tax reliefs depend on the VCT and portfolio companies maintaining their qualifying status.

The investment may be volatile and difficult to sell

VCT shares and the shares of smaller unquoted companies, could fall or rise in value more than other shares listed on the London Stock Exchange’s main market. They may also be harder to sell.

Got a client in mind? We can help

Speak to a member of our team to discuss tax-efficient options for clients who want to plan for retirement.
Out of office hours? Email us and we’ll do our best to contact you within 24 hours.

Key documents

Octopus Titan VCT brochureDownload
Octopus AIM VCTs brochureDownload
Octopus Apollo VCT brochureDownload
Octopus Ventures EIS Service brochureDownload
Octopus AIM Inheritance Tax ISA brochureDownload

Related webinars

On demand webinarVenture Capital TrustsCPD activity

Identifying clients who could benefit from a VCT

Business Development Managers Jim Cavey and Peter Marsland give an introduction to venture capital trusts (VCTs) and discuss client planning ideas where VCTs could be used. This session is CPD accredited.

Duration: 38mins