VCT Tax Relief

The VCT tax relief is available for self-employed individuals. You can claim the tax relief through an adjustment to your tax code. This means that your income tax will be reduced until the whole amount of your VCT tax relief is used up. The first step is to write to the HMRC and request an adjustment. You should also send your national insurance number, P60 form, and a copy of your VCT tax certificate. It may take a month for the adjustment to take effect.

How To Get VCT Tax Relief

The VCT must be approved every year you acquire shares and sell them, but there is no minimum period to hold the shares. You can apply for VCT tax relief on new and second hand shares. You must hold a minimum of 70% qualifying investments, and holdings in qualifying companies must be less than 15%. The VCT cannot retain more than 15% of its income. If you’ve ever been denied the tax relief on your income, you’ll be glad you applied for it.

There’s a limited limit to how much VCT tax relief you can claim each year. The maximum relief is PS6,000 for the tax year you acquired the VCT. The limit is capped at PS2,000 per year, but only if you have a large enough income tax liability. However, this is not a permanent benefit. You must hold the VCT for five years in order to maintain the tax-relief.