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Aim flood alert as VCT chase stocks

Aim will be flooded with new money in April which could see a valuation bubble as VCT managers all chase the same stocks, warns VCT specialist Noble.

Chief executive Henry Chaplin says that with the VCT tax breaks set to expire at the end of the current tax year and no mention of extending them in the pre-Budget report, a rush of VCT launches is likely in the run-up to April.

Both Chaplin and Keydata head of communications Roddi Vaughan-Thomas warn that VCT managers will struggle to find enough quality stocks on Aim for investment.

VCTs are obliged to invest at least 70 per cent of their cap- ital into qualifying stocks within three years and Chaplin and Vaughan-Thomas say Aim is likely to become overvalued.

Chaplin says: “VCT managers raising too much money in one year will have problems investing it all. Aim is likely to become overpriced because of the money going into it and VCT firms without the flexibility to look at unquoted stocks will be stuck in a narrow field next April.”

Vaughan-Thomas says: “There is a danger that there will be a stampede for products, with investors buying on the tax break alone without considering the underlying investment.”

Chelsea Financial Services managing director Darius McDermott says: “There are a lot of rogue stocks floating on Aim and managers will need a strong degree of expertise to sort the wheat from the chaff.”


Brown sinks Sipps

Chancellor Gordon Brown has axed property Sipps in a shock U-turn that consigns two years of hype and millions of pounds to the scrapheap. In his pre-Budget report on Monday, Brown stripped away tax relief on residential property going into pensions after A-Day and branded it a prohibited asset class incurring tax. The shock move […]

EU stands by pledge to stem new regulation

The European Commission is standing by proposals to vet new rules thoroughly and stop a wave of new regulation hitting EU financial markets over the next five years. In its long-awaited white paper outlining the EC’s regulatory priorities until 2010, the commission pledges to deploy open, transparent policy-making and impact assessments before introducing new rules. […]

Friends and HBOS invest into Thinc Destini

Thinc Destini has been valued at 109m following a multi-million pound investment by financial services insititutions, including Friends Provident and HBOS.Prudential has also backed the firm by providing a financial support package which Thinc Destini says will “revolutionise the way we buy our financial services.”Annual turnover is currently at 45m.Thinc Destini group chief executive Simon […]


Out from the long grass? An IT and NI merger

Those with a long memory will recall that at the start of the last parliamentary term George Osborne announced his intention to merge income tax (IT) and national insurance (NI).  Headline grabbing as the initiative was, the reality of the complexities, challenges and costs of such a move resulted in this idea being kicked into the political long grass.


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