Who should consider VCTs?
VCTs are only really a consideration for sophisticated investors with significant investment portfolios who can afford to take a long-term view and are comfortable with the risks of investing in smaller companies. VCTs are therefore not suitable for all investors.
We feel that at most they should account for 5 to 10% of your equity portfolio, but obviously if you can both afford, and are prepared, to take more risk this percentage can be increased. They are designed to pay out any profits only when the companies in which they invest are sold, and so you must take a long-term view (5-10 years plus).
Important information
Please remember, VCTs are higher risk and should only be a consideration for those who can afford to take the risk, their value will fall as well as rise. You should hold them for the long term, but you could still get back less than you invested. Please remember, the value of tax savings will depend on your circumstances and tax rules can change over time.
