Save For Your Child’s Wedding with a Venture Capital Trust Investment


If you are a parent of young children, the thought of them getting married may seem like a distant dream. However, kids grow up fast, and before you know it you could be facing a huge bill for a wedding. Once all the different elements of the big day have been added up, you may need to find several thousand pounds to give your child a day to remember. While you could start a savings account to prepare for such a huge event, low interest rates will make the task a difficult one. But VCT investments may be an opportunity to grow your capital sufficiently to pay for the wedding of your child’s dreams.

What is a VCT Investment?

A venture capitalist trust is an investment opportunity that is managed by a third-party management company. The VCT provider invests in a portfolio of start-up businesses and fledgling companies using money from thousands of individual investors. Most VCTs are publicly listed companies, so your investment is used to purchase shares in the VCT business. Like any shareholder, you will be paid dividends if profits are made, and you can enjoy watching your capital grow in line with the growth of the business.

If you want to pay for a fancy reception, a wedding dress, cars, entertainment, food and the myriad of expenses that are associated with a modern wedding, you may need between £10,000 and £20,000 – a significant sum by any standards. But by investing your initial capital in investment trusts, you have the chance of earning a return that simply isn’t feasible with ISAs and high street savings accounts.

How You Can Grow Your Wedding Fund Through a VCT

Using your capital to buy shares in a VCT delivers a range of potentially profitable benefits. Perhaps the most impressive is the chance to claim up to a 30 percent tax rebate. So, if you invest an initial £10,000 in VCT shares, you could be able to claim £3,000 back from your tax bill – provided you have paid at least that amount in income tax. That could provide you with an extra £3,000 for your wedding fund – perhaps enough to pay for a honeymoon. You will also be able to defer any capital gains tax you owe if your shares are issued within twelve months of your gains being made.

If you choose your investments wisely with the help of an experienced financial advisor, your trust may earn you a steady stream of dividend payments. Another fantastic feature associated with VCTs is that these dividend payments are exempt from income tax. If, after the term of your investment lapses, your capital has grown in line with the trust, you will also be exempt from capital gains tax – leaving you more money to plan the wedding you really want.

Despite these very impressive benefits, there are some risks associated with VCTs. Because they deal with largely unproven companies, there is always the chance that the businesses your trust is investing in could go under – as so many do in the early days of operations. Your financial advisor will probably suggest that you spread your risk across several tax efficient investments. But with the chance to invest up to £100,000 in a VCT – the resultant £30,000 in tax relief may make this particular risk one worth taking.

Your child’s wedding day will probably be the most important day of their life so far, so it’s never too early to start planning for it – regardless of how old your child is now. With expert help from a financial advisor and a broad portfolio of investments, you can take the first steps to planning a truly memorable wedding day.

2 Responses to Save For Your Child’s Wedding with a Venture Capital Trust Investment

  1. Gwenn Panny says:

    Time to open a venture capitalist trust for my kid then. Better to start early.

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