What is the percentage income tax relief available for a VCT investment?

What is the percentage income tax relief available for a VCT investment?

• A. 30%
• B. 50%
• C. 20%
• D. 40%

Answer: (A)

The correct percentage income tax relief available for a Venture Capital Trust (VCT) investment is 30%. This tax relief is designed to encourage individuals to invest in small, unlisted companies that qualify, supporting the growth of new businesses and fostering innovation. When an individual subscribes for shares in a VCT, they can claim a relief of 30% on the amount invested, up to a maximum investment limit, which provides an immediate tax incentive. This relief can be very appealing to investors as it reduces their income tax liability for the year in which the investment is made. Additionally, investors can benefit from tax-free dividends from the VCT and no capital gains tax on the profit when they dispose of the shares, provided the shares have been held for a minimum period. This comprehensive set of tax benefits makes VCT investments attractive to higher-rate taxpayers and those looking to reduce their overall tax burden while supporting small enterprises.

The correct percentage income tax relief available for a Venture Capital Trust (VCT) investment is 30%. This tax relief is designed to encourage individuals to invest in small, unlisted companies that qualify, supporting the growth of new businesses and fostering innovation.

When an individual subscribes for shares in a VCT, they can claim a relief of 30% on the amount invested, up to a maximum investment limit, which provides an immediate tax incentive. This relief can be very appealing to investors as it reduces their income tax liability for the year in which the investment is made.

Additionally, investors can benefit from tax-free dividends from the VCT and no capital gains tax on the profit when they dispose of the shares, provided the shares have been held for a minimum period. This comprehensive set of tax benefits makes VCT investments attractive to higher-rate taxpayers and those looking to reduce their overall tax burden while supporting small enterprises.