Wealth Club has reported a surge in demand for Venture Capital Trusts (VCTs), with investment levels rising 538% the day after the Budget compared with the average day in November last year.
Total VCT applications reached £2 million, up sharply from last year’s average of £319,700. It followed the Chancellor's announcement that income tax relief on VCTs will be cut from 30% to 20% from April 2026.
Alex Davies, CEO and Founder of Wealth Club, said:
“The decision to cut VCT relief from 30% to 20% has sparked a Black Friday rush for the top VCT managers, with Wealth Club seeing a 538% rise in VCT applications the day after the Budget.
“The sudden urgency makes sense. VCTs have limited capacity, and even in normal times top managers often sell out fast. With investors keen to lock in 30% income tax relief before next year, there will be a real “buy it while stocks last” dynamic to the VCT market this year.
“We suspect this is just the start of the stampede – and we expect demand to remain high for the rest of the tax year. However, while this year’s shelves will be stripped bare, the outlook for next year is less certain.
“Back in 2006, the last time tax relief on VCTs was cut by 10%, funds raised fell 65% year-on-year. Only time will tell if investors prove less sensitive this time round.”
