Are VCTs still 'the next best thing' for clients?

‘These reliefs are constantly changing’

Sophia Panayi
clock • 7 min read

Venture Capital Trust providers believe VCTs are still “the next best thing” to mitigate tax even after changes announced in the 2025 Autumn Budget. Advisers, however, remain hesitant over whether the risks outweigh the benefits.

VCTs launched in 1995 as part of a government initiative to encourage investment into early-stage venture businesses. Triple Point retail strategy director Rosalind Hudson acknowledged VCTS are "inherently pretty high risk" for an individual to invest in. To counter the risk, the government offers various tax incentives. As of April 2026, investors receive 20% up-front tax relief for every pound put into a VCT. Hudson noted that investors must be income tax payers to benefit from this and must hold investments for five years. Investors are also offered tax-free dividends. ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on VCTs / EIS

Andrew Aldridge: Happy Christmas. Too early?

Andrew Aldridge: Happy Christmas. Too early?

'By acting now, advisers can help clients avoid the January scramble'

Andrew Aldridge
clock 06 July 2026 • 6 min read
AIC calls on MPs to reconsider cut to VCT tax relief

AIC calls on MPs to reconsider cut to VCT tax relief

Response to report on UK scale-ups

clock 02 July 2026 • 1 min read
VCTs bring green shoots as tax burdens bite

VCTs bring green shoots as tax burdens bite

The VCT fundraising season is in full swing

Simon Moon
clock 21 April 2026 • 4 min read