The autumn Budget did not treat venture capital trusts (VCT) investors kindly. Chancellor Rachel Reeves announced that from April 2026, the rate of income tax relief will be slashed from 30 per cent to 20 per cent. Suddenly, these high-risk investments seem like a far less attractive option.
Alan, 59, had already been debating whether he should hang on to his extensive VCT holdings. After retiring earlier this year, he is looking to reorient his portfolio to fund his travels and so that he can pass on as much wealth to his children as possible.
“I have invested a significant amount of money in VCTs. At one point, these were paying me more than 9 per cent [yield] per year in tax-free dividends, but over the past few years the return has fallen to around 6.5 per cent,” Alan says.
