Exploring venture capital trusts

Article Abstract:

British venture capital trusts (VCTs) usually seek to attract investors near the end of the tax year, since investors may want to use them to defer capital gains. Investors may have gains above the exemption level of 7,100 pounds sterling, and the gains can be held until their cost falls, if a VCT investment is made before a year has elapsed since the disposal. There is tax relief of 20% on investments in VCTs and capital gains tax can be deferred, while dividends from holdings in VCTs are not subject to tax.

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Risk and relief are traded off

Article Abstract:

Advice is provided on investing in British venture capital trusts, including risks and tax advantages.

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Venture capital trusts go on parade

Article Abstract:

Venture capital trusts (VCTs) offer United Kingdom investors an opportunity for tax savings, but they also represent risk. Other products with tax advantages are coming under tighter control, but VCTs involve a small cost to the Treasury in relation to personal equity plans and tax-exempt special savings accounts. VCTs involve risk because they invest in small companies which run a greater risk of going bankrupt. The stocks have to be held for a minimum of five years or the tax advantages are lost.

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