Budget could boost buoyant VCTs
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Venture capital trust expert Martin Churchill says the VCT market is on track to raise £300m for the last tax year with future fund-raising prospects getting a lift from changes put forward in the Budget.
In last month’s Budget, the Government said it would look at the case for broadening the investment criteria for venture capital trusts and enterprise investment schemes, including increasing the employee limit, gross asset limit and annual investment limit for qualifying companies.
Tax Efficient Review editor Churchill says VCT managers are set to double last tax year’s fund-raising and the Budget changes will boost the market next year.
He says: “I think we are on track to do £300m, which is a very good result and twice that of last year. This is driven partly by pension interest and partly by the new 50 per cent income tax rate.
“VCTs were given a tick in the box in the Budget, which I think says they are here to stay and the attraction to investors will just continue.
“Enterprise investment schemes are still the poor cousin of the VCT and there is nervousness from investors after Octopus withdrew its EIS and stopped taking any more money. But it has been a good year for VCTs and I think next year will be even better as people put a toe in, particularly IFAs, and re-engage with the market.”
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