VCT & EIS

This section provides an analysis of the tax reliefs afforded by Venture Capital Trusts and the Enterprise Investment Scheme, and highlights the important differences between the two schemes.

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Venture capital trusts (VCTs)

A Venture Capital Trust ( VCT ) is an investment company broadly similar to an investment trust. It will be quoted on the stock market and will have to invest at least 70% of its assets in companies that would qualify under the EIS, and must distribute most of its income by way of dividend. It must be able to demonstrate a spread of investments: none can account for more than 15% of the value of its portfolio.These are other conditions for VTCs.

Enterprise investment scheme (EIS)

The EIS is a government scheme that allows certain tax reliefs for investors who subscribe for qualifying shares in qualifying industries.

VCT & EIS compared

The reliefs for Venture Capital Trusts and the Enterprise Investment Scheme are similar in many respects, but there are some significant differences.