Jack Rose: What VCTs do and how to use them

The UK government established venture capital trusts (VCTs) 21 years ago in a bid to encourage investment into smaller UK businesses. The generous tax benefits offered are intended to compensate for the increased risk associated with investing in smaller, less liquid companies. From their introduction in 1995 to the end of the 2015/16 tax year, VCTs have raised more than £6bn, according to the AIC - along the way providing important support and funding to the UK's SME sector. Despite a number of rule changes last year - and as the following graph shows - VCTs continue to enjoy strong dem...