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Investors save £235 million in tax by making use of VCTs

News Team, 18/03/2019

Wealthy investors cut their tax bill by £235 million last year by investing in Venture Capital Trusts (VCTs), according to HMRC statistics.

Financial adviser Salisbury House Wealth said the amount of tax relief through investing in VCTs has risen by 24 percent over the last five years, having stood at £190 million in 2013/14.

Investors in VCTs receive “generous” tax breaks, including: getting 30 percent Income Tax relief on investments up to the value of £200,000; no tax on dividend payments from shares in VCTs; and no Capital Gains Tax on disposals of shares in VCTs, the firm explained.

As listed investment vehicles designed to invest in early-stage companies that meet certain criteria, VCTs have become increasingly popular among wealthy investors as a tax-efficient way of investing, as they can also offer significant return potential to investors.

Tim Holmes, managing director of Salisbury House Wealth, says VCTS can make “an important contribution” to an investment portfolio for those who can “afford to take a long term view and do not have high liquidity requirements.”

However, they “do not just offer tax breaks though. These investment vehicles also provide crucial funding to early stage companies in the UK.”

“With the tax year-end approaching, anyone interested in investing in VCTs should act now,” he concluded.

Founded in 1986, Salisbury House Wealth is a Leicester-based financial adviser.

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