Venture Capital Trusts (VCT)
Note: VCT investments are inherently risky and investors should expect to retain their investment for at least 5 years to maximise the available tax reliefs. Whilst Morgans promotes VCT products which are structured to provide investors with a significant level of downside protection against commercial losses, no guarantee can be given that an investor's capital will be returned fully intact.
MAIN TAX RELIEFS
Income Tax
- Individual adult investors can obtain a tax credit of 30% on the cost of new VCT investments
- The credit is available up to a maximum investment of £200k per tax year
- The VCT shares must be held for 5 years otherwise the upfront relief is clawed-back by HMRC
- Dividends received from ordinary VCT shares are exempt from Income Tax
Capital Gains Tax
- Capital gains realised on disposal of VCT shares are exempt from CGT
- Individuals can no longer defer tax on capital gains by investing into VCT companies
SUMMARY
VCT investments continue to offer upfront Income Tax relief, as well as tax-exempt gains on successful disposals. However VCT investments tend to be at the higher end of the risk spectrum. Frequently VCTs will be made up from a portfolio of qualifying investments which are managed on a diversified basis by established fund managers. Generally VCTs are realised via a winding-up of the constituent assets, but remain largely illiquid throughout their investment period.
CLICK HERE FOR PRODUCTS CURRENTLY AVAILABLE
For more information contact us via Send a Message