Venture Capital Trusts

Invest in a diverse portfolio of early-stage businesses and claim attractive tax reliefs.

What are Venture Capital Trusts?

The UK has a rich ecosystem of early-stage businesses with growth potential. But without funding and specialist support, many might never get off the ground.

A Venture Capital Trust (VCT) is a company that buys small stakes in a large number of early-stage companies. The VCT can hold these companies for many years and support their growth, adding new investments over time.

You might have heard of many of the companies Octopus has backed, such as Cazoo, Secret Escapes, Zoopla, or Graze.

Of course, not every smaller company will be a success story. That’s why VCT investors can claim tax reliefs, which encourage investment in early-stage businesses.

Watch our short video which explains:

  • What a VCT is
  • How VCTs work
  • The benefits and risks of investing

An introduction to Venture Capital Trusts – Runtime 4:19

What are Venture Capital Trusts?

The UK has a rich ecosystem of early-stage businesses with growth potential. But without funding and specialist support, many might never get off the ground.

A Venture Capital Trust (VCT) is a company that buys small stakes in a large number of early-stage companies. The VCT can hold these companies for many years and support their growth, adding new investments over time.

You might have heard of many of the companies Octopus has backed, such as Cazoo, Secret Escapes, Zoopla, or Graze.

Of course, not every smaller company will be a success story. That’s why VCT investors can claim tax reliefs, which encourage investment in early-stage businesses.

Watch our short video which explains:

  • What a VCT is
  • How VCTs work
  • The benefits and risks of investing

An introduction to Venture Capital Trusts – Runtime 4:19

Reasons to invest

Income tax relief

Investors can claim upfront income tax relief equal to 30% of their investment on the first £200,000 each tax year.

Tax free dividends

The tax-free dividends paid by a VCT can provide a supplementary income, which could be useful, especially if investors are approaching or in retirement.

Supporting Uk businesses

Investing in a VCT means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.

Portfolio diversification

VCTs can diversify an investor’s portfolio by giving them access to companies they may not otherwise hold.

Risks to bear in mind

Capital at risk

The value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

Volatility and liquidity

VCT shares could fall or rise in value more than other shares. They may also be harder to sell.

Qualification status

Tax reliefs depend on a VCT maintaining its VCT-qualifying status.

Tax treatment

Tax treatment depends on individual circumstances and tax legislation may change in the future.

VCTs from Octopus

Resources and guides

Guide to Venture Capital Trusts

Learn how VCTs work, the types of companies they invest in, and the benefits and risks of investing in a VCT.

Guide to claiming income tax relief

This guide explains how you can claim tax relief on a VCT investment.

Contact our team

Got a question?
Call us at 0800 316 2067

Reasons to invest

Income tax relief

Investors can claim upfront income tax relief equal to 30% of their investment on the first £200,000 each tax year.

Tax free dividends

The tax-free dividends paid by a VCT can provide a supplementary income, which could be useful, especially if investors are approaching or in retirement.

Supporting UK businesses

Investing in a VCT means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.

Portfolio diversification

VCTs can diversify an investor’s portfolio by giving them access to companies they may not otherwise hold.

Risks to bear in mind

Capital at risk

The value of a VCT investment, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.

Volatility and liquidity

VCT shares could fall or rise in value more than other shares. They may also be harder to sell.

Qualification status

Tax reliefs depend on a VCT maintaining its VCT-qualifying status.

Tax treatment

Tax treatment depends on individual circumstances and tax legislation may change in the future.

Venture capital investing focus: Tax year end seminars

5 January – 7 February 2023

20 UK locations ● CPD qualifying ● Food provided

Our investments place investor’s capital at risk.

VCTs from Octopus

Resources and guides

Guide to Venture Capital Trusts

Learn how VCTs work, the types of companies they invest in, and the benefits and risks of investing in a VCT.

Have a client in mind?

Want to understand how VCTs could benefit your clients? Browse our client scenarios.

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