Venture capital trusts

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.

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

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

A VCT should be considered a high-risk investment
VCTs invest 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 also have higher rates of failure.

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 you decide to sell your VCT shares, you may not be able to find a buyer, or you may have to accept a price lower than the net asset value of the investment. However, we will do our best to help you sell your VCT shares.

Past performance is no guide to the future
The past performance of an investment is not a reliable indicator of future results. Nor should you rely on any forecasts made about future returns.

Tax rules can change
The VCT tax benefits we’ve described in here are correct at the time of going to print. However, rates of tax, tax benefits and tax allowances do change. In addition, the tax benefits available to you through this investment depend on your 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, you may be asked to repay any upfront income tax relief that you have already claimed.

We’re alerting all Octopus VCT shareholders about the misuse of the Octopus name by third parties who claim to be connected to Octopus or our VCTs in some way.

We have been made aware of cases where our investors have been contacted by fraudsters:

• Selling shares with little or no value in companies which may not even exist
• Someone offering to buy their shares at a higher price than their market value

These scams target existing VCT shareholders and will sound like attractive offers. The caller will often ask you to pay something up front, such as a bond or other form of security, which they claim you’ll receive back if the sale doesn’t go through. They may also ask you to sign a form preventing you from disclosing details of the offer. Please be aware:

These are fraudulent scams. They are in no way connected with Octopus or our VCTs. We will never call you to attempt to buy your shares or sell shares to you. If you are concerned about a suspicious call, letter or email you receive, give our Client Relations team a ring on 0800 316 2295.

Where do they obtain your details? Octopus will never pass investor details to a third party without their permission. Unfortunately, these scam companies take details from the VCT shareholder registers, which is a publicly available document. Home telephone numbers are obtained from lists of telephone numbers that are for sale via the internet.

Your rights to compensation. In many cases, these share scam companies are based overseas, although some may give a UK postal address and phone number. These companies are not authorised by the Financial Conduct Authority (FCA) so investors may have no right to complain or claim compensation.

What should you do? If you receive an unexpected call from someone offering to either sell VCT some shares or to buy your VCT shares, particularly using high-pressure tactics, please hang up the phone. Cold calls from companies offering to sell you shares are unlawful and should be reported to the FCA or the police. More information is available from the Financial Conduct Authority.

Further information. If you have any questions about Octopus products or these share scams, please feel free to contact us on 0800 316 2295. Alternatively, more information is available from the Financial Conduct Authority.

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.

What are the risks?
We recommend you seek independent advice before investing. Our products place your capital at risk and you may get back less than you invest. It’s really important to us that you understand the risks which come with investing in our products. Please read through the risks in the dropdown menu above.

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 GM Results
Latest GM 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 August 2018

For further documentation please see the document library.

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.

What are the risks?
We recommend you seek independent advice before investing. Our products place your capital at risk and you may get back less than you invest. It’s really important to us that you understand the risks which come with investing in our products. Please read through the risks in the dropdown menu above.

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 August 2018

For further documentation please see the document library.