Investopedia explains 'Venture Capital Trust - VCT'
Venture capital trusts are tax-advantaged investments in the United Kingdom, often relieving investors of many of the tax implications surrounding dividends and capital gains, or offering lower taxation rates.
Typically, they are bound by regulations to the percentage of funds that must be allocated to qualifying investments, or holdings, along with timelines for capital injection loans and investments outside of those held in said qualifying holdings. However, the majority of VCTs aim to invest a large majority of their funds with the goal of achieving higher risk-adjusted returns than other investments available in the market.
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