VENTURE CAPITAL TRUSTS
UNLOCKED

Gain exposure to the UK’s early-stage ecosystem with a single ticket

Growth focused investment products that can also pay dividends

Get started from as little as £3,000. 
For Sophisticated and High Net Worth Investors only

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These products are high-risk investments and you are unlikely to be protected if something goes wrong. Don’t invest unless you’re prepared to lose all the money you invest. Sidekick does not provide tax advice - please seek independence guidance.

Why we offer VCTs

The ultra-wealthy use a variety of tax-efficient vehicles to maximise their wealth, combined with wider exposure to private markets. We want to bring this easily and digitally to you. VCTs provide a unique combination of tax savings and opportunities to invest in UK high-growth companies.

Alessandra Farnum, Head of Alternatives

The Ultra-Wealthy Advantage

Having products to optimise tax liabilities is a key tool in the ultra-wealthy arsenal. 

The benefits of VCTs

VCTs, provided via Sidekick, enable you to invest in the future of innovative UK companies and enjoy significant tax benefits.

Tax efficiency

Up to 30% income tax relief on investments up to £200,000 per year. Earn tax-free dividends and capital gains on your VCT investments.

Growth potential

Invest in early-stage, high-growth UK companies with strong potential for returns, with low entry tickets.

Risk-adjusted exposure

Get a mix of growth and income-generating, tax-optimised returns

Key risks to consider

High risk investments

These investments are high risk, and the value of your investment may go up as well as down. Your returns aren’t guaranteed, and you may not get back the full amount you invest.

Tax status

The VCT must maintain its qualifying status for you to benefit from the tax relief. The tax incentives are prescribed by the UK government, and may be subject to change in the future.

Liquidity risk

VCT shares may be hard to sell, and you may not be able to sell your shares at a fair price. You also have to hold your shares for 5 years to retain your tax benefits.

Tax treatment

The impact of VCTs tax treatment depends on individual circumstances.

The Application Process

Check criteria

VCTs are currently only available to Sophisticated & High Net Worth Investors

Choose a VCT

Select a VCT from our expertly curated options that match your goals.

Apply

Fill in our online application, which we will submit on your behalf.

Get tax relief

Claim up to 30% income tax relief, reducing your overall tax burden.

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FAQs

Your questions  ON VCTS

What is a VCT?

A Venture Capital Trust (VCT) is a publicly traded company on the London Stock Exchange operating as a venture capital fund with the objective to invest in smaller, unlisted or AIM-listed companies. VCTs have strict criteria for qualifying investments, but they generally partner with young, entrepreneurial businesses. These businesses tend to have high growth potential, but are also higher risk.

Think of a VCT as an investment vehicle that allows investors to support the growth of emerging companies—businesses that might one day become household names but need capital to get there.

What makes VCTs particularly interesting is the suite of tax benefits they offer, designed to encourage investment in these riskier ventures.

How does a VCT work?

When you invest in a VCT, you’re buying shares in the VCT itself and gain exposure to the fund's existing and growing portfolio. Investors don’t own shares in the portfolio companies themselves, however. The trust’s managers use capital raised from investors to invest in a diverse range of early-stage companies across various sectors—think tech startups and niche consumer brands.

The key goal for VCT managers is to help these companies grow and create value for investors by producing returns, which are aligned with the objectives of unlisted venture capital funds as well.

Despite being listed, the fund itself holds illiquid assets. Typically, VCTs will hold their investments for anywhere from three to seven years, before exiting and reinvesting in new opportunities.

Key benefits of VCTs

Here’s a quick look at some of the key benefits VCTs offer:

  • 30% Income Tax Relief: One of the biggest draws of VCTs is the ability to claim up to 30% upfront income tax relief on investments of up to £200,000 per tax year. This means you can claim up to £60,000 in income tax relief per year. However, to keep this benefit, you need to hold your VCT shares for at least five years and you need to have bought the shares during a new share issuance.
  • Tax-Free Dividends: Any dividends paid by VCTs are completely tax-free. This makes them especially attractive if you’re looking for a way to generate additional, tax-efficient income from your investments.
  • No Capital Gains Tax: If the value of your VCT shares increases and you sell them after five years, you won’t have to pay any capital gains tax.

The combination of tax-free dividends and CGT exemption makes VCTs a highly tax-efficient option for investors.

While these tax incentives are appealing, it’s important to remember that they are subject to certain conditions—and VCT investments come with a higher level of risk. These tax reliefs are offered to compensate investors for the higher risks that VCTs present.

What are the risks of VCTs?

VCTs can offer appealing benefits, but they aren’t for everyone. Here are some of the key risks to consider:

  • Higher Risk Companies: VCTs typically invest in younger companies that are still in their early stages of development. While these businesses have high growth potential, they’re also more likely to fail compared to larger, established firms. This means that the value of your investment can go down as well as up.
  • Liquidity Challenges: VCT shares can be harder to sell than those of larger companies, which makes them less liquid. If you need to access your money quickly, you may find it difficult to sell your shares at a fair price. VCTs are best suited to investors who are comfortable tying up their money for at least five years.
  • Minimum Hold Period: In order to retain the tax benefit associated with VCTs, investors must hold onto these investments for a minimum period of 5 years. If investors sell their shares prior to the 5 years, any upfront income tax relief that has been claimed must be repaid. This makes VCTs best suited for long-term investors who don’t need immediate access to their capital.
  • Performance Volatility: The performance of a VCT depends on the success of the companies it invests in, which can be unpredictable. While some companies may soar, others may struggle, which means your returns aren’t guaranteed.
  • Tax Status: If a VCT loses its status, then the tax reliefs described above may be withdrawn. The reliefs from taxation are subject to change with new government policy. Investors are advised to take their own independent financial advice on the tax aspects of their investment.
Can I sell my VCT shares?

You can choose to sell your shares at any point, whether you purchase your shares during a new share issuance, or if you purchased on the secondary market. It’s important to note that VCT shares can be less liquid than traditional investments, which means you may not be able to sell your shares quickly or at a price that reflects their true value. You will need your VCT share certificate you received upon investment in order to sell your shares..

If you sell before the 5 year minimum hold period, you must notify HMRC and repay any income tax relief received. 

In any case, there are a few options for investors who want to sell their shares:

  • Buy-back programs: Most VCTs offer “buy-back” programs to repurchase shares from existing investors at a discount to NAV. VCT managers typically offer a smaller discount than what you’d find on the secondary market, though it’s not guaranteed. However, these schemes are limited in scope as buyback programs are subject to VCTs cash reserves and only offered periodically.
  • Secondary market: Since shares are listed, you can also sell shares via a share dealing account or a broker. However, given the different tax benefits for buying these assets in the secondary market, discounts are typically high and it may take longer to sell positions since activity is lower.

VCTs are designed to be long-term investments, and holding them for the full five years is essential to retain your income tax relief. After this period, many investors choose to stay invested to continue receiving tax-free dividends and retain diversified exposure to the funds’ underlying portfolios.

How to claim tax relief

After completing your investment and your shares are allotted, you will receive a share certificate and a VCT tax certificate (keep these safe!)

You or your financial advisor will need to notify HMRC of the amount you have subscribed for in VCT shares, either by completing the appropriate section on your self-assessment form or by writing to them and enclosing the tax certificate issued with your shares.

You can also claim tax relief by adjusting your tax code. In this case, any changes to your tax will be implemented at source through PAYE. You can set this up by writing to HMRC and requesting a change to your tax code. You will need to enclose a copy of your tax certificate.

If you’re unsure about how to claim tax relief or want guidance on what option is most suitable for you, please refer to HMRC’s policies or speak to an accountant or advisor.

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Sidekick Money Ltd is a company registered in England and Wales (No. 13882980). Sidekick Money Ltd is authorised and regulated by the Financial Conduct Authority (FRN 984829). Our address is 21-33 Great Eastern St, London, EC2A 3EJ.

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