Don't knock the opportunities that VCTs may bring

tax efficient vehicles

Although tax relief on VCTs has been reduced from 40% to 30% there are still opportunities, especially for high net worth individuals, to reclaim income tax and diversify their portfolios with private equity

Venture capital trusts (VCTs) are proving to be an interesting topic this tax year. The rules surrounding investment have changed significantly and, on the face of it, VCTs appear less attractive than they have been for the previous two tax years. The Chancellor has reduced income tax relief on VCTs from 40% to 30%. He has extended the qualifying period for VCTs from three years to five years and has reduced the maximum size of companies that VCTs can invest in, from those with gross assets of £15 million to those with gross assets of £7 million. Tax relief on VCTs has been phenomenal ove...