VCT

In this lesson

1. 0:00 Venture capital trusts explained
2. 0:25 How VCT risk spreading works
3. 0:48 VCT eligibility requirements
4. 1:05 VCT tax relief and allowances
5. 1:37 VCT dividends and capital gains

About this lesson

You'll discover the key conditions for VCT investment, including age requirements and company eligibility, and understand the specific tax treatment that makes VCTs distinct from similar schemes like EIS and SEIS. The video covers the mechanics of VCT investment: instead of backing a single company, you subscribe for shares in a VCT, which then invests your money across numerous unquoted trading companies. This diversification reduces your overall risk compared to direct investment in one business. On the tax side, VCTs offer income tax relief of up to 30% on investments up to £200,000 per tax year (maximum relief of £60,000), though relief is limited to the year of investment and cannot be carried back. The standout tax advantage is that VCT dividends are completely tax-free, unlike EIS and SEIS dividends which are taxable. Capital gains on share sales are exempt from tax, but losses cannot be claimed and shares don't qualify for business property relief. This content is essential for ACCA and CIMA students covering investment incentives and tax-efficient investment strategies in their taxation modules.

Duration: 2m