Temporary increase in tax relief on VCTS

pre-budget report

The Government is proposing a temporary increase in income tax relief on venture capital trusts (VCT...

The Government is proposing a temporary increase in income tax relief on venture capital trusts (VCTs) from 20% to 40% for a two-year period from 6 April 2003 to encourage investment. However, rather than the investor receiving the additional 20% income tax relief, it will be paid directly to the VCT, a measure expected to cost the government in the region of £50m per year. This in effect means that for every £1 invested, the VCT manager will receive £1.20. Additionally, the government is considering replacing the current capital gains tax (CGT) relief for investments in VCTs with income...