A ‘venture capital trust’ (VCT) is essentially a specific type of investment trust which invests in unquoted trading companies. Individual investors in VCTs receive various tax incentives:

the rate of income tax relief on qualifying investments is 30%;

the maximum amount invested for which tax reliefs can be obtained is £200,000 per tax year;

exemption from income tax on distributions paid by VCTs (see ¶8415); and

exemption from CGT on the disposal of ordinary shares in VCTs, whether or not they were new shares when acquired (see ¶15870).

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