Platform provider Hargreaves Lansdown has launched a new online venture capital trust (VCT) investment service.

The service will launch offering five VCTs from Octopus Investments, Calculus and Blackfinch Ventures.

VCTs facilitate the investment of early-stage entrepreneurial companies.

The launch comes following the hike to capital gains tax in the recent Budget.

Profits from the sale VCTs are exempt from CGT when they have been held for over five years, and some investors can also claim 30% income tax on their VCT investments.

In the 2022/23 tax year, statistics from the National Audit Office show that over 26,000 VCT investors claimed income tax relief on £985m of VCT investments.

Emma Wall, head of platform investments at Hargreaves Lansdown, said: “HL’s new VCT online service will broaden our client offering, support the VCT investment market and help shape it for the future.

“After the commitment made by the Government to extended VCTs to 2035, and given the tax changes announced in the Budget, VCTs are a great way for people to invest their money in a tax-efficient way, over the longer term, as part of a diverse investment portfolio.”

Hargreaves will charge a £50 dealing charge when clients apply for the new online VCTs. There will be no platform fees, no fees for payment of dividends and no commission. After the initial investment, Hargreaves will charge a £50 fee on all VCT trades/

Hargreaves previously offered VCTs but withdrew from the market for new clients in 2018.

Jess Franks, head of investment products at Octopus Investments, said: “It’s great to see Hargreaves Lansdown coming back to the world of VCTs, offering suitable retail investors the opportunity to access exciting, early-stage private companies. What this shows is how VCTs are continuing to become a more mainstream part of investing for those clients who undertake their own planning and are comfortable with the risks associated with the asset class.”

Retail investors can invest up to £200,000 per tax year in VCTs. They can benefit from an initial 30% income tax relief on the amount invested up to £60,000 (limited by the amount of income tax paid by the investor in the year).

Profits are generally paid to VCT investors as dividends, with all dividends paid by VCTs free of income tax.