The tax-free way to support a start-up
Investing your money in fledgling firms can bring big tax perks, but you need to weigh up the risks
Investing in the smallest companies listed on the UK stock market has the potential to bring bumper returns and can also be incredibly tax-efficient — but it’s not for the faint-hearted.
Venture Capital Trusts (VCTs) are investment companies that hold stocks in a range of other firms but are listed on the stock market in their own right. They specialise in investing in young companies that are either listed on the stock market or privately owned.
VCTs can be a good option for those who have already used up their annual allowances for other tax-efficient schemes, such as stocks-and-shares Isas or pensions.
There are three different types of VCTs. Generalist VCTs typically invest in small, unquoted companies in a range of sectors; Aim VCTs invest
