Statistics on Venture Capital Trusts (VCTS) released by the UK government on 11 December 2018 show that VCTs issued shares valued at GBP 745 million in 2017-18. This represented a 30% increase from 2016/17 (GBP 570 million) and was the highest amount raised by VCTs since 2005/06.

The tax regime for VCTs provides that if a VCT is correctly structured it can obtain tax relief for the trust itself and for its investors. The VCT regime is one of the schemes that encourage investment in small and start-up companies by giving tax relief to individuals based on a percentage of the amount invested.

Income tax relief of 30% is available for shares that are subscribed for in a venture capital trust, deductible from the total income tax payable by the individual investor. The investor may obtain the tax relief on investments up to a maximum of GBP 200.000 per year. The VCT shares must be held by the taxpayer for a minimum qualifying period. Dividends on VCT shares acquired, whether by subscription or otherwise, are also exempt from tax, provided that the shares are held for the qualifying period.

In 2017/18 43 VCTs raised funds, up from 38 in 2016/17. The total number of VCTs now managing funds has fallen slightly to 70 in the year 2017/18. The report notes that VCTs have raised approximately GBP 7.7 billion of funds since they were introduced in 1995.

The report contains statistics for tax relief claimed for the year 2016/17. In 2016/17 there were 15,120 investors in VCTs and they claimed income tax relief on GBP 500 million of their investments, a GBP 67 million (15%) increase compared with 2015-16. Most VCT investors invest relatively small amounts into VCT funds. In 2016/17, 41% of the VCT investors made a claim for an investment of GBP 10,000 or less. Only 7% invested above GBP 100,000. However in terms of value the investments between GBP 150,000 and GBP 200,000 accounted for more than a quarter (28%) of the total amount of investment in 2016/17.