The reluctance of UK banks to lend to small businesses means venture capital trusts (VCTs) are enjoying the run of the house in terms of where to invest their funds, negotiating ever better deals.
Not only this, but fiscal policies in austerity Britain are creating a perfect storm for these tax-efficient vehicles, and VCT groups believe the current tax year could prove to be one of the best since they were first created in 1995.
Stung by tougher limits on pension contributions and the new 50 per cent income tax band for higher earners, ever more investors are turning to this complex, niche product. The attractions of 30 per cent tax relief and tax-free dividends that VCTs offer has begun to outweigh concern about the risks of investing in such small companies and the sector’s wide disparity in performance.
To read the full, original article click on this link: FTAdviser.com - Focus: Special report - VCTs: The perfect storm
Author: Oliver Haill
