VCT fundraising reaches third highest annual total in 2025/26

Venture capital trusts (VCT) raised £918m in the 2025/26 tax year, the third highest annual fundraising on record, figures from the Association of Investment Companies (AIC) have revealed.

This represented a 3 per cent increase compared to 2024/25, when VCTs raised £895m.

The top fundraisers in 2025/26 were Albion VCTs (£90m), British Smaller Companies VCTs (£85m), and Octopus Apollo VCT (£82.7m).

The two tax years in which VCT fundraising was greater than in 2025/26 were 2021/22 (£1.13bn) and 2022/23 (£1.08bn).

In 2025/26, VCT fundraising was eligible for upfront income tax relief of 30 per cent, although this is set to be cut to 20 per cent from 2026/27.

The AIC noted that fundraising for the current tax year was therefore likely to be lower as investors were put off by the reduction in tax relief.

“A strong year of fundraising by VCTs is good news for young, ambitious UK companies with growth potential,” AIC chief executive, Richard Stone, said.

“This is money VCTs can use to help their current investee companies scale up, as well as identifying exciting new opportunities they can help to get off the ground.

“Unfortunately, fundraising this tax year is likely to be a different story. The cut in income tax relief from 30 per cent to 20 per cent shifts the risk/reward calculation for investors and ultimately that will mean growth capital drying up for some of the UK’s most promising companies.

“We will be monitoring the situation and will continue to urge the government to reconsider its decision.”

Wealth Club founder and CEO, Alex Davies, said the 2025/26 figures highlighted the continued importance and appeal of VCTs for UK investors, particularly in a higher-tax environment.

“However, there is now a significant challenge facing the VCT market – and it is no longer a distant risk, but a reality,” Davies continued.

“In the November Budget, whilst some VCT rules were improved, the Chancellor also announced that income tax relief on VCT investments will fall from 30 per cent to 20 per cent from this tax year.

“History shows the potential consequences of such a move. The last time income tax relief was reduced, in 2006/07, VCT fundraising fell by 65 per cent year-on-year.

“While the impact this time may be less severe – given today’s higher tax environment and fewer alternative tax-efficient investment options – we still expect a material decline in annual VCT investment.”

---