How can I invest in VCTs
with HL?
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 only really a consideration for 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.
What you'll need
You’ll need to have a Fund and Share Account, with the money you wish to invest held within the account.
When you’re ready, find the VCT offer you’re interested in, and you can apply online.
When applying you’ll need to have read and agreed to the offer terms and conditions, prospectus and Key Investor Information Document.
Open a fund and share account
What happens after I apply for a VCT offer?
Your application will show in the pending orders section of your Fund and Share Account. You won’t be able to cancel your application after you apply.
It may take up to six weeks after your order before your shares are allocated. You can check the prospectus for details of the VCT’s allocation policy.
You’ll then receive a secure message confirming your allocation and once we’ve received the shares they’ll appear in your Fund and Share Account.
Your VCT tax certificate will be sent to your home address by the VCT provider up to 10 working days after the allocation so you can claim your tax relief.
What costs are there for applying through HL?
Unlike some other brokers, we don’t take any commission on the initial charge or ongoing charge from the VCT provider, with any payments due to us given to clients as extra shares or paid to them by other means. This will be shown on the VCT offer page.
If you apply with HL, we will have a discount on the initial charge that you won’t get by applying directly with the VCT provider.
This means that more of your money will be invested rather than taken by charges.
A £50 dealing charge applies when you trade, which can make investing with HL cheaper than elsewhere when you take the commission into account.
Any VCT shares will be held in our Fund and Share Account so you don’t have to worry about paper share certificates. We don’t charge a platform fee for holding VCT shares with us.
When you come to sell, a £50 dealing charge will apply to the sale or any buybacks.
Can I transfer VCT shares to HL?
Yes, you can transfer VCT shares to HL if you bought them elsewhere, just like normal shares. This means you can see all your VCTs in one place, and sell them if and when you want to.
Lodging a VCT share certificate or transferring from a nominee service will not affect your rights to tax relief as the investments will not be sold as part of the process.
We don’t charge to transfer shares to us and you can follow our normal transfer process. But if you’re transferring from a nominee, they may have charges to transfer out, so check before transferring.
Once transferred, you’ll be able to apply for existing investor discounts with HL for that VCT.
If you’re lodging share certificates, we would recommend sending them recorded delivery, as they can be expensive to replace.
How can I sell VCT shares?
There are two options for selling VCT shares.
As the shares are traded on the London Stock Exchange, you can sell them at any time.
But as even the largest VCTs are quite small, they can be illiquid as there are not many buyers and sellers. This means it’s often difficult to sell shares on the stock exchange and the sale price may be lower than the value of the underlying investments. It may even be difficult to find a price at all in some cases.
But if you have held them for less than five years, you will have to pay back the tax relief. So, check details of your purchase carefully before making a sale.
Alternatively, VCT providers may also provide buybacks from time to time, where they buy shares from existing investors. This is often at a small discount to the value of the shares.
Details of the VCT’s buyback policy are often provided in the prospectus. They are, however, subject to conditions and not guaranteed. The VCT may also have limited money available when they offer a buyback, so your shares may end up being sold pro-rata.
When you come to sell, a £50 dealing charge will apply to the sale or any buybacks.
Contact our dealers if you wish to place a sale.
I want to invest in a certain VCT but you don’t offer it, why?
We’re working on bringing new VCTs to the platform and hope to make as many available as possible.
As we’re offering a service where all shares are held in a Fund and Share Account, with online applications, and giving back commission to investors, this involves new processes and can take time for some VCT managers to set up.
If a VCT you’re interested in isn’t shown on our website, sign up for our VCT offer alerts and we’ll let you know if and when it’s available.