What is the IHT relief status for VCT?

The correct answer about the Inheritance Tax (IHT) relief status for Venture Capital Trusts (VCT) is that VCTs are considered not exempt from IHT. VCT shares are subject to IHT unless certain conditions are met, specifically regarding business property relief.

VCTs are investment vehicles that offer tax benefits to encourage investment in small businesses. However, simply holding shares in a VCT does not automatically grant exemption from IHT. For IHT relief to apply, the shares must typically be held for a specific period. Business Property Relief (BPR) may apply, which can grant full or partial relief from IHT for qualifying business assets, but such relief is contingent on the investment meeting specific criteria, including the nature of the business and the duration of the investment.

This concept clarifies the nature of IHT concerning VCTs and strengthens the understanding of investment vehicles in the context of inheritance tax.