A Venture Capital Trust or VCT is a highly tax efficient UK closed-end collective investment scheme designed to provide capital finance for small expanding companies and capital gains for investors.
Additional meaning of Venture Capital Trust:
First introduced by the Conservative government in the Finance Act, 1995 they have proved to be much less risky than originally anticipated. The last created VCTs to encourage investment into new UK businesses.
Investors can invest up to £200,000, increased from £100,000 in 2004. VCT shares issued after 5 April 2006 need only be held for five years to retain the initial income tax relief and capital gains tax deferral.
Typically VCTs aim to invest the majority of assets in qualifying companies, 80% of which are established companies or management buyouts.