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Octopus AIM VCTs – capturing the growth potential of AIM along with all the tax incentives of a VCT

At Octopus we’re always looking for ways to help people do smarter things with their money. That’s why we’re a great believer in tax efficient investing. One of the advantages of VCTs for income-seeking investors is that they aim to pay out their profits to investors in the form of tax-free dividends.

We’re also a firm believer in the growth potential of the Alternative Investment Market (AIM), which has been helping exciting and innovative smaller companies thrive for almost two decades.

The Octopus AIM VCTs combine the tax incentives of a VCT with the opportunities of maturing smaller companies. The result? You have the potential for growth, delivered in the form of consistent dividend payments. The dividend payments made by the VCTs are tax free and can be used either to supplement or replace other investment income.

Although many VCTs focus on ‘early stage’ smaller companies, the Octopus AIM VCTs feature a large number of established, maturing AIM-listed companies. Many of the companies in both Octopus AIM VCTs have been listed on AIM for several years, and the majority of Octopus AIM VCT portfolio holdings are already delivering sales growth and generating profits*.

With our new share offer, you have the opportunity to invest in two established AIM VCT portfolios, thereby increasing the potential for tax free dividend income from year one.

What are the risks?

We recommend you seek independent advice before investing. Our products place your capital at risk and you may get back less than you invest. It’s really important to us that you understand the risks which come with investing in our products.

Please read through our Guide to Risk

This advertisement is issued by Octopus Investments Ltd and is not a prospectus. Any decision to invest under the offer should be made solely on the basis of the information contained in the Prospectus and application forms which can be downloaded from the document library.

Now open: Combined new share offer for Octopus AIM VCT and Octopus AIM VCT 2

Both Octopus AIM VCT and Octopus AIM VCT 2 are now open for investment through a combined new share offer. The offer means you can split your investment between AIM VCT (60%) and AIM VCT 2 (40%) to get the best of both funds. Or you can place 100% in one VCT.

Here’s a summary of the key tax benefits:

  • 30% income tax relief on up to £200,000 in a tax year (if shares are sold before the end of the five-year qualifying period then the tax relief will need to be paid back).
  • No capital gains tax if you sell your VCT shares for a profit.
  • Up to four tax-free dividends a year if you choose the combined offer. Both VCTs have an annual dividend target, paid twice a year (for each VCT) which means you could benefit from potentially four tax-free dividend payments per year. For information about the dividend target, and history of dividend payment, please see our brochure.

What makes AIM attractive for VCT investors?

  • High-quality smaller companies: the Octopus Smaller Companies team invests in market-leading businesses across many different industries, including building materials, technology development and medical devices.
  • Greater transparency: AIM-listed companies must meet certain regulatory and governance requirements, ensuring higher levels of transparency than unquoted and early-stage businesses.
  • Diversified portfolios: – there are more than 60 different sectors on AIM and plenty of companies to choose from. The Octopus Smaller Companies team invests in more than 60 companies across the two funds, so investors can be confident their investment will feature many of the brightest companies from AIM.

Details of the Octopus AIM VCT combined new share offer:

  • Raising £20 million across both VCTs
  • Minimum investment is £5,000 – tax relief is available on annual investments up to £200,000
  • Investors can split their investment between Octopus AIM VCT (60%) and Octopus AIM VCT 2 (40%), or place 100% in a single fund
  • Early bird offer of a 2% reduction in the initial fee: available until 30 September 2014
  • Loyalty offer of an additional 0.5% discount on the initial fee for existing Octopus VCT investors to say thank you for their continuous support – available throughout the fundraising period
  • Next allotment will take place on 22 December 2014
  • The offer will close no later than 10 August 2015

Key risks for investors to consider

Investments in smaller companies carry higher risks than larger company investments.

Your capital is at risk and you may not get back as much as you invested. VCT shares are likely to have higher volatility and liquidity risk than other types of shares quoted on the London Stock Exchange Official List.

VCTs should be viewed as a long-term investment as shares need to be held for five years to qualify for tax reliefs. If an investor decides to sell their VCT shares at any point, they may not be able to find a buyer straightaway. AIM VCTs, however, intend to offer investors a buyback option. For more details, please see our brochure.

Tax treatment depends on the individual circumstances of each investor and may be subject to change. The availability of tax reliefs also depends on the companies a VCT invests in maintaining their qualifying status. HM Revenue & Customs may change the rules on VCT tax relief in the future.

Past performance is not a reliable indicator of future results and any forecast is not a reliable indicator of future performance.

Please also note that this advertisement is not a prospectus and investors should only subscribe for VCT shares on the basis of information in the relevant prospectus, which can be obtained from here.

What’s next?

For more information about the AIM VCTs combined new share offer, please speak to your adviser (if you have one) or download the prospectus, brochure and the product summary here. You can also call us on 0800 316 2295, we’d be happy to hear from you.

*Source: Octopus. Date: August 2014.

Document Library

  • Download

    Octopus AIM VCTs Circular – August 2014

  • Download

    Octopus AIM VCT 2 DRIS application form

  • Download

    Octopus AIM VCTs DRIS application form

  • Download

    Octopus AIM VCTs product overview

  • Download

    Octopus AIM VCT and VCT 2 prospectus and application form

  • Download

    Octopus AIM VCTs application form

  • Download

    Octopus AIM VCTs brochure

  • Download

    Octopus guide to claiming VCT tax relief

View all documents

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Important Information

Our products place your capital at risk and you may not get back the full amount invested. Tax treatment may be subject to change and depends on the individual circumstances of each investor. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status. Neither past performance or forecasts are reliable indicators of future results and should not be relied upon. Unquoted or smaller company shares are likely to have higher volatility and liquidity risks than other types of shares quoted on the London Stock Exchange Official List. Website content is not intended to constitute investment, tax or legal advice. We recommend you seek independent advice before investing in our products.

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