Venture Capital Trusts

By LBV

11 Jan 2012

The chancellor’s decision to remove the £1 million limit on investing into a single company in 12 months has the power to remove significant hurdles for the industry. The rule had created significant administrative burdens for VCTs, preventing individual trusts from providing all of the funds a small company might require, even where the amount is well within the overall limits set by the scheme. Under the current rule this means that a company seeking £5 million of investment has to reach agreements with five VCTs rather than one.

This attempt at reducing red tape should significantly enhance the capacity of the VCT sector to support entrepreneurial businesses. Any growth would then in turn offer greater choice and diversification for retail investors

Venture Capital Trusts enable investors to invest indirectly in a range of small, higher-risk trading companies whose shares and securities are not listed on a mainstream stock exchange.

The Government offers investors a range of upfront and long-term tax benefits when investing in VCTs (new shares):
• upfront income tax relief of 30%, on up to £200,000 invested per tax year, but the shares have to be retained for five years
• tax-free dividends
• tax-free capital gains, when you sell your shares

Hargreave Hale manages two VCTs, both of which invest in the Alternative Investment Market (AIM) market, an exchange on which smaller companies’ shares are traded. The Hargreave Hale AIM VCT 1 and the Hargreave Hale AIM VCT 2 are both managed by the highly acclaimed Giles Hargreave and his investment management team.

Investors should be aware that capital is at risk when investing in a Venture Capital Trust. Venture Capital Trusts invest in smaller companies and these generally carry higher risks for several reasons including liquidity issues, smaller management, shorter trading histories, and smaller financial resources available. Shares in smaller companies are also more sensitive to price movements. Due to the greater risks involved in smaller company investments, investors have the potential to receive greater rewards.

Tax benefits depend on individual circumstances and may be subject to future tax rule changes. They also depend on the companies which the VCT invests in maintaining their qualifiying status.

Dudley Warnes
Hargreave Hale Ltd

 

Enjoyed this? Read more from LBV

Latest news

1

Double delight for Vincents two newest solicitors Beth Laws and Yasmine Dragan at Vincents Solicitors’ office in Winckley Square Preston

Double delight for Vincents two newest solicitors

14 Feb 2025

2

Bowker Motor Group celebrates record number of apprentices in 40 year history Bowker Preston BMW Apprentices.png.png

Bowker Motor Group celebrates record number of apprentices in 40 year history

13 Feb 2025

3

FWP transforms Health-Based Places of Safety for NHS trust One of the Tameside suites

FWP transforms Health-Based Places of Safety for NHS trust

13 Feb 2025

4

Pleasure Beach partners with industry giant Coca-Cola Blackpool Pleasure Beach

Pleasure Beach partners with industry giant Coca-Cola

13 Feb 2025

5

Prestigious honour given to Mark Birchall at Michelin Guide Awards Mark Birchall Courtesy Michelin

Prestigious honour given to Mark Birchall at Michelin Guide Awards

12 Feb 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
Skills Bootcamp in Procurement - Cohort 3
Blue-Modern-Land-Travel-Youtube-Thumbnail-2-1024x576.png.png
LBV Hub Awards
14 Jan 2025 - 18 Mar 2025

Skills Bootcamp in Procurement - Cohort 3

Community & Business Partners CIC, Blackburn, BB2 3UA

09:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces
Supporting Women's Health in Your Teams A Path to Success-3.png.png
LBV Hub Webinar
21 Feb 2025 - 21 Feb 2025

Understanding & Preventing Sexual Harassment - Creating Safe & Respectful Workplaces

*, Online, *

12:30 - 13:30

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Level 3 Emergency First Aid at Work Course - In Person
RKMS ACADEMY LOGO - BLACK AND ORANGE.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Level 3 Emergency First Aid at Work Course - In Person

RKMS Group , Blackpool, FY42DP

09:30 - 17:00

Employment Law, Tax and Payroll Update - East Lancashire
PM and M event
LBV Hub Seminars
26 Feb 2025 - 26 Feb 2025

Employment Law, Tax and Payroll Update - East Lancashire

Accrington Stanley Football Club, Accrington, BB5 5BX

08:00 - 10:00

Preston Freelancer Meet-Up: February
Freelancer Meet-Up Feb.png.png
LBV Hub Networking
26 Feb 2025 - 26 Feb 2025

Preston Freelancer Meet-Up: February

Society1 Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Women's Health champion training
Supporting Women's Health in Your Teams A Path to Success-6.png.png
LBV Hub Webinar
26 Feb 2025 - 26 Feb 2025

Women's Health champion training

*, Online, *

10:00 - 16:00

StackedX with PM+M and CFO Techstack
LBV Hub Seminars
27 Feb 2025 - 27 Feb 2025

StackedX with PM+M and CFO Techstack

Red Hall Hotel, Bury, BL9 5NA

08:00 - 10:00

Kickstart Networking - Crazy Golf at Level, Preston
Kickstart Crazy Golf.png.png
LBV Hub Networking
27 Feb 2025 - 27 Feb 2025

Kickstart Networking - Crazy Golf at Level, Preston

Level, Preston, PR1 1HT

16:00 - 18:00

Post Employee Ownership Trust: What's the story?
LBV image.jpg.jpg
LBV Hub Seminars
04 Mar 2025 - 04 Mar 2025

Post Employee Ownership Trust: What's the story?

Brabners, Preston, PR5 6AW

11:00 - 12:30

North West (Preston) Finance Leaders Networking Event
MHA-BTI Logo_black (002).jpg.jpg
LBV Hub Networking
05 Mar 2025

North West (Preston) Finance Leaders Networking Event

Farington Lodge Hotel, Stanifield Lane Farington, Preston, PR25 4QR

08:00 - 10:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV120 Online Graphic 1
Subscribe now

Weekly news bulletin