Tax break flatters VCT returns

allenbridge data shows vcts struggling to compete with wider market without tax breaks

Generous tax breaks alone are helping generalist VCT managers compete with the wider market. Analysis of annualised returns by Allenbridge shows that, before tax breaks are factored in, the average private equity or generalist VCT launched between April 1995 and April 1997 produced an annualised return of 0.7% on NAV. This compares with returns of 5.4% from the FTSE All-Share over the same period. In fact, the figures on trusts launched up to the end of the 2002-03 tax year show that only those launched in 2000-01 have outperformed the main equity index. But when the 20% income tax brea...