Venture Capital Trusts

Budget Changes

Clubfinance can arrange your Venture Capital Trust ('VCT') investment on an execution-only basis. Arranging your VCT investment through Clubfinance, you will receive:

CLICK HERE FOR A LIST OF OPEN VCTs & OUR DISCOUNTS

* - We rebate 75% of trail commission on VCTs where the trail commission on that VCT is 0.5% or less per annum. Clubfinance retains any VCT trail commission above 0.5% per annum in full. Please note that VCT trail commission rebates paid to an investor after the 5th April 2013 are subject to Income Tax, and Clubfinance must deduct basic rate Income Tax from the payment to you.

The Government offers tax breaks for individuals investing in small high-risk companies through various Venture Capital Schemes, including the Enterprise Investment Scheme (EIS), Seed Enterprise Investment Scheme (SEIS) and the Venture Capital Trust (VCT) scheme.

VCTs are higher-risk investments and may only be suitable as long-term investments. VCTs purchased from 6th April 2006 must be held for 5 years to avoid loss of Income Tax relief (see tax notes below). Clubfinance Ltd offers an execution-only service; Clubfinance does not give advice or recommendations, and does not assess the appropriateness of an investment for the investor. If you have any doubts as to the suitability of a particular VCT, the agreement underlying it, or VCTs in general, or you require advice of any kind, you should contact another appropriate firm that does give advice and/or assesses appropriateness.

The Money Advice Service has produced some consumer information on VCTs - please click here to access this information on their website.

What is a VCT?

Venture Capital Trusts are designed to encourage individuals to invest indirectly in a range of small higher-risk trading companies whose shares and securities are not listed on a recognised stock exchange, although they can be AIM (Alternative Investment Market) listed. So, if you invest in a VCT, you spread the investment risk over a number of companies. There is a risk that these companies may not perform as hoped and in some circumstances they may fail completely. Over the years Budgets have changed the maximum size of company that VCTs can invest in, meaning that VCT shares issued now may carry a higher or lower risk than those issued in the past.

VCTs must be approved by HM Revenue & Customs, and to gain approval they, must meet and continue to meet certain conditions. This approval enables investors to qualify for certain tax reliefs, but does not guarantee the safety or success of any investments you make in a VCT. If you invest in them you may be entitled to various Income Tax and capital gains tax reliefs, and VCTs are exempt from corporation tax on any gains arising on the disposal of their investments.

VCTs must invest 70% of their funds in qualifying companies with gross assets of no more than £15 million and fewer than 250 full-time employees (or, as announced at the 2015 Budget, and subject to EU state aid approval, fewer than 500 employees for knowledge-intensive companies). To be qualifying, there is also a £5 million annual limit on the total amount that can be raised or received by a single company under any Government State Aid scheme including from VCTs and the EIS (and, as announced at the 2015 Budget, and subject to EU state aid approval, a cap on total investment of £15m (or £20m for knowledge-intensive companies)). Also announced at the 2015 Budget and subject to EU state aid approval, qualifying companies will generally need to be less than 12 years old when receiving their first VCT investment. If the VCT does not invest 70% in qualifying investments after three years, the initial tax breaks can be withdrawn. They can invest the remaining 30% in other ways from cash deposits through to riskier investments, including derivatives.

Investors can subscribe for, or buy, shares in VCTs, which are companies listed on the London Stock Exchange (or another EU Regulated Market), and are similar to investment trusts. They are run by fund managers who may be members of larger investment groups. VCTs realise their investments and make new ones from time to time. Generally, VCTs are considered to be long-term investments.

Being listed shares, you can buy and sell VCT shares in the 'second-hand' market. However Income Tax relief only applies if you buy a VCT through a new issue. The secondary market for shares in VCTs is limited and as a result, shares in VCTs can trade at a discount to their net asset value. To partially address this issue, some VCT Managers offer a 'Buy Back' facility normally at a discount to the net asset value. However, these Buy-Back facilities can be withdrawn.

As with any asset-based investment, the value of a VCT depends on the performance of the underlying assets. The value of the investment and the dividend stream can rise and fall. So you may get back less than you originally invested, even taking into account the tax breaks. The capital you invest is at risk, so you could lose your entire investment.

VCTs carry initial charges and costs together with annual costs, charges and fees, some of which may be performance related. These can be complex. Please refer to the offer documents for the VCT offers you are interested in for details. The levels of charges for VCTs may be greater than Unit Trusts and Open Ended Investment Companies.

Risk Warnings

VCTs are higher risk investments and are generally considered to be long-term investments. Clubfinance Ltd offers an execution-only service; Clubfinance does not give advice or recommendations. VCTs are complex products and are not suitable for all investors. If you have any doubts as to the suitability of a particular VCT, or VCTs in general, or you require advice of any kind, you should seek a personal recommendation from a professional adviser. Do not invest in a VCT unless you have carefully thought about whether you can afford it and whether it is right for you.
Please refer also to the risk warnings and other information contained within the Prospectus or other offer document for the VCT that you have chosen, together with Clubfinance’s Terms of Business. Make sure you understand the risks and benefits before investing.

General

Underlying investments

Long-term investment

Taxation

Charges & performance fees

Security of capital

Limited secondary market

Tax Notes

VCTs carry certain tax advantages. Below is a brief summary of some of the major points relating to VCT shares purchased in the current tax year 2017/18. For more information please see the HM Revenue & Customs website and the product documentation for your chosen VCT.

How to invest - the process

Documents you need to read and retain can be accessed by clicking the icons against each VCT offer on our Open VCTs page. If you have any difficulties please use the contact form below.

EIS-VCT-IHT
Clubfinance Ltd.
PO Box 1036
Hemel Hempstead
HP1 2WU

If you are posting us an item by Recorded or Special Delivery, please use the following address:

EIS-VCT-IHT
Clubfinance Ltd
Amberside House
Wood Lane
Hemel Hempstead
Hertfordshire
HP2 4TP

Open VCTs

The following shows a list of VCTs available for investment through Clubfinance. If there is a VCT open for investment which is not on the list please contact us using the form below. Please click on the VCT for further details including application forms.

Downing FOUR VCT Generalist
Downing FOUR VCT Healthcare
Elderstreet VCT (top-up)
Foresight 4 VCT (top-up)
Octopus AIM VCTs (top-ups)
Pembroke VCT B Share (top-up)

Performance and Prices of Existing VCTs

A useful external website for information on VCT shares, including prices, performance, and holdings is the AIC (Association of Investment Companies), see link below. Using this link, you will leave the Clubfinance website and we have no responsibility for the content. Past performance is not a reliable indicator of future performance.

AIC VCT data

Contact Form

For an offer document / Prospectus / Securities Note and application form, or further information, including a Commission Statement, please see our list of currently available VCTs. If you require any further information or clarification, please use the form below to contact us. Please remember we offer an execution-only service. Please contact a financial adviser if you need advice.

Contact Form
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The lump sum amount you wish to invest, if applicable *
Please use this box for any questions or queries
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Some of the content of this page represents extracts from the HMRC website, www.hmrc.gov.uk, which is Crown copyright material.

Important Information

Clubfinance Ltd is authorised and regulated by the Financial Conduct Authority (firm reference no. 400139). Clubfinance offers an execution-only discount broker service; Clubfinance does not give advice or recommendations. If you have any doubt about the suitability of a particular product or service, or you require advice, you should seek a personal recommendation from an appropriate firm that does give advice. Clubfinance does not produce the products it arranges, or manage the underlying investments. Payments must not be made to Clubfinance, but to the relevant product provider. Contact details for Clubfinance can be found under 'contact'. Users of this website should be aware of the following:

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