Foresight Group is pleased to announce that yesterday’s Budget indicated no change to rules and regulations surrounding the tax status of Venture Capital Trusts ("VCTs") this tax year.
For investors, VCTs are one of the few remaining and most powerful Government-approved tax wrappers available, providing income tax relief, tax-free dividends and tax-free capital growth. For companies seeking investment, VCTs provide a valuable source of funding at a time when banks are unable or unwilling to lend.
Foresight's Group Sales Director, Mike Currie, said:
“VCTs already offer investors significant tax-free income at a time when cash is paying next to nothing. Since we will only be paying more tax in the future, this remains a powerful tax break for UK investors, one of only a few that are still in existence today.”
Foresight strongly recommends that private investors seek advice from a Professional Adviser when considering investment in a VCT. Investors should be aware that an investment in a VCT carries a higher risk than many other forms of investment. In addition the value of an investment in a VCT may go down as well as up and investors may not get back the full amount invested, even after taking into account the available tax reliefs. VCTs usually trade at a discount to their NAV. It may be difficult to exit VCTs and they should be considered as long term investments.