VCTs

VCTs

FORTHCOMING CHANGE relating to the Venture Capital Trust (VCT) ‘sunset clause’ date: On 22 November 2023, the government announced that it will extend the existing sunset clause for the VCT scheme from 6 April 2025 to 6 April 2035. Finance Act 2024 enacts legislation to extend the availability of VCT reliefs to new shares issued before this date, where all the other relevant conditions are met. This measure comes into force on a day to be appointed in regulations.

Like the enterprise investment scheme (EIS), the venture capital trust (VCT) regime is designed to encourage investment in smaller, higher-risk trading companies.

A VCT is a company (not a trust), approved by HMRC, whose shares are admitted to trading in such a way that they meet the listing condition explained in Practice Note: VCTs—VCT conditions for HMRC approval—The listing condition.

Individuals can benefit from a range of tax reliefs, and spread their investment risk, by subscribing for (or buying) shares in a VCT, which, in turn, subscribes for newly issued shares or debt in unquoted companies (companies listed on AIM or PLUS markets (other than

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