Chancellor scales back VCT tax relief

Share buybacks carried out by Venture Capital Trusts (VCT) will no longer qualify for tax relief from April 2014, the government has said.

The Autumn Statement revealed that any investments linked to a VCT share buyback or made within six months of selling shares in the same VCT will not qualify for tax relief. A share buyback is where a VCT launches an offer to existing shareholders to cash in their shares, having originally achieved a 30% tax credit on their investment and held the shares for at least five years, on the condition they then reinvest into a new offer. The clamp down comes after HMRC had already warned it was looking at VCT enhanced buybacks in the April Budget. Oliver Bedford, manager of the Hargreave...