Venture Capital Trusts (VCTs)
Invest in early-stage companies with added tax benefits.
Important information - Venture Capital Trusts (VCTs) invest in small, early-stage, unlisted companies and are considered high-risk investments. It’s difficult to access your money in the short term and their value can go down as well as up so you could get back less than you put in. VCTs are long-term investments and should only be a consideration for experienced investors with larger portfolios. We suggest they form a small part of a diversified portfolio. This isn’t personal advice, if you’re unsure if VCTs are right for you, please consider taking advice. Tax rules can change, and their benefits depend on your individual circumstances.
Venture Capital Trusts (VCTs) are a type of investment fund run by a manager.
They have some similarities with investment trusts but focus on early-stage unlisted companies, some of which aren’t normally available to the general public.
Smaller companies are a vital area of the UK economy. They provide jobs, prosperity and economic growth.
But without funding and the support of VCT managers, many companies we consider household names would never have been able to grow their businesses.
As they’re early-stage companies, they’re not always successful and more likely to fail.
What is a VCT?
So, VCTs are usually for more experienced investors with large, diversified portfolios able to take on more risk. These are often higher or additional rate UK taxpayers who’ve used their ISA and SIPP allowances.
To encourage investment in VCTs, investors are eligible for tax benefits including:
- 30% income tax relief on what you put in VCTs as part of new share issues, as long as you invest for at least five years.
- No capital gains tax on your holding
- No tax on dividends from VCTs
3 benefits of VCTs
Portfolio diversification
VCTs allow you to add exposure to smaller companies that you can’t often get through traditional stock market investments. And a VCT will hold multiple companies, so you’re not just invested in one company.
Tax benefits
Invest up to £200,000 a year and get up to 30% income tax relief, tax free dividends and no tax on capital gains.
Investment income and growth potential
VCTs invest in companies with a potential for high growth, so they could offer a boost to a broader investment portfolio. They often provide their returns to investors using dividends. These are not guaranteed.
Risks
Capital and liquidity
VCTs are higher risk investments, their value and any income from them, can fall as well as rise more than other types of investment. You may not get back what you put in. They can also be harder to sell.
Tax
You can only claim tax relief on VCT investments if you already pay UK income tax and it’s part of a new issue of shares. Other tax benefits still apply to shares bought on the stock exchange. Tax benefits depend on your individual circumstances and tax rules can change.
Qualification for tax benefits
VCTs must maintain their VCT-qualifying status to keep the tax benefits for their investors. You must also hold a VCT for 5 years to keep the tax relief.
Why invest in VCTs with HL?
- We make it easy: Apply online in minutes and hold your shares in your Fund and Share Account. No messing about with paper forms, cheques or share certificates.
- Great discounts: We provide a discount on the initial charge so it’s cheaper than applying directly with the VCT provider.
- No hidden commission: Unlike other providers HL doesn’t take any commission from the VCT provider. Pay one £50 dealing charge when you apply and a £50 exit charge when you sell. Any commission paid by the VCT manager, will be given back to you so your money could go further than investing elsewhere.
Invest with HL from a £10,000 lump sum up to the full VCT allowance of £200,000.
Available VCT offers
These are the current offers available. More may be added in future as and when they are available.
We offer this service to allow clients to invest in VCTs that we can make available, but we haven’t selected them on the basis of independent research. These aren’t personal recommendations, if you’re unsure if a VCT is right for you, please take personal financial advice. All investments and any income from them, fall as well as rise in value, so you could get back less than you invest.
Each VCT issues a prospectus at launch which gives details of specific risks and conditions. It should be read thoroughly before considering an investment.
Minimum investment £10,000
-
Initial charge before discount
The initial charge applied by the VCT provider before any discounts are applied.5.5% -
Discount via HL
The discount HL offers to its clients.3% -
Net initial charge
The initial charge minus the discount HL offers to its clients.2.5% -
Target dividend
The target dividend of the VCT. Often provided as a percentage of the net asset value (NAV) of the VCT.5%
Blackfinch Spring VCT invests in young companies at the growth stage of development. They look for companies that have already raised funding, gained traction and aim to accelerate the scale-up process. They focus on companies across many industries using the Internet, mobile devices and social media to offer their customers better products and services.
Early bird discount: 1.5% discount on applications received by 5pm 27 January 2025, 1% discount on applications received by 5pm 3 April 2025.
-
Inital charge before discount
The initial charge applied by the VCT provider before any discounts are applied.5% -
Discount via HL
The discount HL offers to its clients.2% -
Net initial charge
The initial charge minus the discount HL offers to its clients.3% -
Target dividend
The target dividend of the VCT. Often provided as a percentage of the net asset value (NAV) of the VCT.5%
Calculus VCT invests in entrepreneurial business with growth potential across technology, healthcare and entertainment sectors. It looks for scalable companies with developed market traction with defensible intellectual property.
Early bird discount: 2% discount on applications received by 5pm 17 December 2024, or on the first £2mn raised. 1.5% discount on applications received by 5pm 19 February 2025, or next £3mn raised.
-
Initial charge before discount
The initial charge applied by the VCT provider before any discounts are applied.5.5% -
Discount via HL
The discount HL offers to its clients.2.5% -
Net initial charge
The initial charge minus the discount HL offers to its clients.3% -
Target dividend
The target dividend of the VCT. Often provided as a percentage of the net asset value (NAV) of the VCT.5%
Octopus AIM VCT invests in emerging UK companies listed on AIM. It holds around 80 established, maturing businesses from a diverse range of sectors. The team focuses on companies where there’s a strong business idea and plenty of room to grow.
-
Initial charge before discount
The initial charge applied by the VCT provider before any discounts are applied.5.5% -
Discount via HL
The discount HL offers to its clients.2.5% -
Net initial charge
The initial charge minus the discount HL offers to its clients.3% -
Target dividend
The target dividend of the VCT. Often provided as a percentage of the net asset value (NAV) of the VCT.5%
Octopus AIM VCT 2 invests primarily in AIM companies to help them grow. It looks for companies with strong management, healthy balance sheets and potential for growth. A sister VCT of Octopus AIM VCT, the team has over 150 years of investment experience.
-
Initial charge before discount
The initial charge applied by the VCT provider before any discounts are applied.5.5% -
Discount via HL
The discount HL offers to its clients.2.5% -
Net initial charge
The initial charge minus the discount HL offers to its clients.3% -
Target dividend
The target dividend of the VCT. Often provided as a percentage of the net asset value (NAV) of the VCT.5%
Octopus Apollo invests in higher-risk smaller businesses that have already brought their product or service to market successfully. The manager focusses on business-to-business software companies with high growth potential. The VCT has a diversified portfolio of around 45 companies.
Early bird discount: 1% discount on applications received by 5pm 31 January 2025.
-
Initial charge before discount
5.5% -
Discount via HL
3% -
Net initial charge
2.5% -
Target dividend
5%
Blackfinch Spring VCT invests in young companies at the growth stage of development. They look for companies that have already raised funding, gained traction and aim to accelerate the scale-up process. They focus on companies across many industries using the Internet, mobile devices and social media to offer their customers better products and services.
Early bird discount: 1.5% discount on applications received by 5pm 27 January 2025, 1% discount on applications received by 5pm 3 April 2025.
-
Inital charge before discount
5% -
Discount via HL
2% -
Net initial charge
3% -
Target dividend
5%
Calculus VCT invests in entrepreneurial business with growth potential across technology, healthcare and entertainment sectors. It looks for scalable companies with developed market traction with defensible intellectual property.
Early bird discount: 2% discount on applications received by 5pm 17 December 2024, or on the first £2mn raised. 1.5% discount on applications received by 5pm 19 February 2025, or next £3mn raised.
-
Initial charge before discount
5.5% -
Discount via HL
2.5% -
Net intial charge
3% -
Target dividend
5%
Octopus AIM VCT invests in emerging UK companies listed on AIM. It holds around 80 established, maturing businesses from a diverse range of sectors. The team focuses on companies where there’s a strong business idea and plenty of room to grow.
-
Inital charge before discount
5.5% -
Discount via HL
2.5% -
Net initial charge
3% -
Target dividend
5%
Octopus AIM VCT 2 invests primarily in AIM companies to help them grow. It looks for companies with strong management, healthy balance sheets and potential for growth. A sister VCT of Octopus AIM VCT, the team has over 150 years of investment experience.
-
Initial charge before discount
5.5% -
Discount via HL
2.5% -
Net initial charge
3% -
Target dividend
5%
Octopus Apollo invests in higher-risk smaller businesses that have already brought their product or service to market successfully. The manager focusses on business-to-business software companies with high growth potential. The VCT has a diversified portfolio of around 45 companies.
Early bird discount: 1% discount on applications received by 5pm 31 January 2025.
Insights
Guide to Venture Capital Trusts
Everything you need to know about investing in VCTs
How to claim VCT income tax relief
All you need to know to claim your VCT income tax relief
