VCTs operate in much the same way as standard investment trusts, which are among the oldest forms of collective investment.

A VCT is a publicly listed company that pools investors' money to buy shares in VCT-qualifying businesses, many of which are privately owned. When you invest in a VCT, you’re buying shares in the VCT itself, not directly in the companies it invests in. Upon investing, you’ll receive a share certificate reflecting your investment and a tax certificate to claim the 30% upfront income tax relief from HM Revenue & Customs (HMRC).

As listed companies, VCT shares are traded on the London Stock Exchange. VCTs are required to:

• Publish an annual report and accounts.
• Maintain an independent Board of Directors to protect shareholders’ interests.
• Hold general meetings, including an annual general meeting (AGM).
• Adhere to corporate governance standards like any public company.

Investing in an established VCT provides instant access to a diversified portfolio of companies. The Government imposes strict criteria on the types of businesses that can qualify for VCT investment, which we’ll explain further later.