A venture worth waiting for

Article Abstract:

British venture capital trusts (VCTs) have attracted more funds in 2000, and are seeking investors prior to the end of the tax year, though tax rules mean that investments can be delayed. Investors can freeze gains achieved three years prioe to a qualifying VCT investment, or a year afterwards. There has been a reduction in the qualifying period for tax benefits for holding VCTs to three years from five years. This reduction also applies to enterprise investment schemes.

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Risky gains for top rate taxpayers

Article Abstract:

United Kingdom venture capital trusts (VCTs) offer tax advantages to investors, but they also involve risk. There are benefits both in terms of income tax on dividends and capital gains tax on profit from investments. Young companies tend to have a high failure rate, and stock exchange rules do not apply. There may also be a long wait before benefits from investments in young companies are achieved, so investors should be aware of the high risks involved in VCTs.

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Seeking shelter

Article Abstract:

Venture capital trusts (VCTs) are a tax shelter available to British investors who can defer tax payments by investing in unquoted trading companies. They are high risk investments but managers have to have experience if they are to receive approval. There is a wide range of VCTs available for investors, including vehicles focusing on high technology, and funds geared to companies listed on the Alternative Investment Market. Enterprise Investment Schemes are also available as ways of deferring tax.

Mutual funds

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