Next steps in your Octopus VCT journey
Are you considering what your investment options are? Let us help you decide what’s next.
Your options after five years
VCT shares need to be held for the minimum five-year holding period in order to retain the upfront income tax benefits. If you’ve met this minimum holding period and are considering your next steps, you have three options. We always recommend talking to a financial adviser before making any investment decision. Octopus can’t offer you financial advice, but if you have any questions, please call us on 0800 316 2295.
Hold or add to your investment
If you choose to continue holding onto your shares, there’s no need for you to do anything.
- Your VCT investment will continue to target tax free dividends and growth.
- If you choose to add to your investment, you’ll receive a 1% loyalty discount as a thank you for your continued support.
- To add to your investment, contact your financial adviser or apply online.
Sell and reinvest in another VCT
If you’d like to reinvest the proceeds into another Octopus VCT, you can:
- Claim up to 30% income tax relief on your new investment*.
- Benefit from tax free dividends and growth.
- Receive a 1% loyalty discount as a thank you for your continued support.
You can see which VCTs we have open by clicking the button below.
Sell your shares
You can either sell your shares back to the VCT or on the secondary market.
- To understand how to sell your shares please read our share buyback guide by clicking the link below.
- The VCT will only purchase shares from you at certain times of the year and this is at the discretion of the board.
- If you’d like to sell your shares directly back to the VCT through Octopus, we recommend submitting your forms as early as possible. You may still benefit from tax free dividends and growth until your shares are sold.
* If you sell shares in a VCT within six months of buying new shares in the same VCT, you will not be able to claim any income tax relief on these shares.
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.
Tax treatment may change
Tax treatment depends on individual circumstances and may change in the future. Tax reliefs depend on the VCT maintaining its qualifying status.
Five-year minimum holding period
Investors need to hold 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 (HMRC) any upfront income tax relief you’ve claimed.
Volatility and liquidity
VCTs invest in smaller companies that are often not listed on the main market of the London Stock Exchange. Investments in smaller companies can fall or rise in value much more sharply than shares in larger, more established companies. They can also be harder to sell.
Reminder of the benefits
Income tax relief
Investors can claim upfront tax relief equal to 30% of their investment on the first £200,000 per annum invested. Dividends and capital gains are also tax-free.
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.
Support UK growth businesses
Investing in a VCT means investors are helping innovative smaller companies to create jobs, prosperity and economic growth across the UK.
VCTs can help diversify an investor’s overall portfolio by giving them access to companies they may not otherwise hold.