Venture capital trust definition
A venture capital trust (VCT) is a publicly listed entity that’s specific to the UK that enables investors to provide venture capital to new ventures, projects or businesses. VCTs specialise in very early-stage investments. They are given preferential tax treatment in the UK, with investors often offered lower tax rates or relief from taxation rules that normally apply to dividends or capital gains on stock dealing.
VCTs are considered to be above average risk as they invest in new businesses and there’s a high failure rate among startups. They are closely regulated, with rules governing how much of the funds can be allocated to any qualifying investment for example.