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VCTs have increased in popularity over the 30 years since they were introduced.
But why are they a valuable planning tool now more than ever?
- Frozen income tax bands.
- Shrinking capital gains, savings and dividend allowances.
- Higher levels of inflation driving asset values higher.
These factors combine to make the returns from non-tax efficient investments less compelling.
A return of 5% may appear attractive. But once tax has been paid, how attractive is the return in reality?
And this is a reality many more are facing as increasing numbers of taxpayers are being dragged into higher income tax brackets. Take the “60% tax-trap”, where the combination of additional rate tax and the tapered personal allowance combine to an effective 60% tax on income.
And with tax-year end on the horizon, clients will be aware of their income tax liability for the year. VCTs could help mitigate some of this.
Here’s a short update about how Venture Capital Trusts (VCTs) could help advisers to navigate this environment.
Read (6 mins)
A diversifying VCT opportunity for your clients
Octopus Apollo VCT has a portfolio of around 45 smaller business-to-business (B2B) software companies and is the second largest VCT in the market, with net assets of £439 million.1
Octopus Apollo VCT aims to accelerate the growth of these B2B software companies, which have successfully brought their product or service to market and require capital to accelerate their growth. This adds a point of difference where an investor already owns shares in one or more VCTs that invest in companies at an earlier stage and in sectors other than B2B software.
Early bird discount – Applications and cleared funds received by 5 pm on Friday 31 January 2025 will qualify for a 1% early bird discount.
Find out more and apply online
Key risks to keep in mind:
- This is a high-risk investment. The value of an investment in Octopus Apollo VCT, and any income from it, can fall as well as rise. Investors may not get back the full amount they invest.
- Tax treatment depends on individual circumstances and may change in the future.
- Tax reliefs depend on the VCT maintaining its VCT-qualifying status.
- VCT shares are by their nature high risk, their share price may be volatile and they may be hard to sell.
1By funds under management, The Association of Investment Companies, December 2024
VCT investments are not suitable for everyone. Any recommendation should be based on a holistic review of your client's financial situation, objectives and needs. This communication does not constitute advice on investments, legal matters, taxation or any other matters. This document is an advertisement and not a prospectus. Any decision to invest should only be made on the basis of the information contained in the prospectus, supplementary prospectus, AIFMD supplement and the Key Information Document (KID) available at octopusinvestments.com/apollovct/. CAM014683.
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