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Economics and investment: Venture Capital Trusts—navigating complex terrain

One of their most popular features also happens to be one of their most confusing

By Andy Davis   Winter Special

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Venture capital trusts have become a favourite “pension proxy” for better-off savers in danger of maxing out their retirement fund. But as I mentioned last month, they are complex beasts, and one of their most popular features—generous, tax-free dividends—also happens to be one of their greatest sources of complexity.

VCTs invest in risky, early-stage companies, which makes the fact they pay dividends at all rather odd. Companies usually pay dividends out…

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