Venture Capital Trusts (VCTs) have recorded the third highest year of fundraising in the 24/25 tax year, raising £895 million, despite concerns about the UK economy.
The data represents strong investor demand in exciting early-stage British companies and a regulatory environment that supports private investor participation in the funding of ambitious UK companies.
“Despite a difficult economic backdrop, VCTs had their third best year for fundraising,” said Richard Stone, Chief Executive of the Association of Investment Companies.
“This is good news for the UK’s innovative young companies because VCTs provide finance and advice to these businesses, helping them scale up and succeed. VCTs have raised over £4.6 billion over the last five years to help get hundreds of ambitious businesses off the ground.
“VCTs offer attractive tax incentives to investors, while their investee companies create economic and social benefits for local communities across the UK. Some may even grow to become household names. This year’s strong fundraising shows that VCTs remain a favoured investment for those who want to back growing UK companies while reducing their tax bill. Growth is the number one objective for the government and VCTs provide vital capital to the businesses that will fuel that growth.”
The most recent tax year saw the third highest level of VCT raises behind only 2021/22 when VCTs raised £1.13 billion and the 2022/23 tax year in which £1.08 billion was raised.
VCT offer investors generous tax benefits for investing in early-stage companies, including 30% tax relief and full relief from capital gains and dividend income.