Close Brothers is offering a new share issue in its AIM venture capital trust (VCT). The C shares were introduced to meet demand for tax-efficient investment in the light of some investors pocketing windfalls from companies such as Scottish Widows.
The AIM VCT will invest in developing companies in the UK quoted on the FTSE Alternative Investment Market (AIM). But Close Brothers will avoid risky start-ups in preference to companies that have been trading for at least three years.
VCTs have higher risks than unit trusts or Isas. This product is suitable for sophisticated investors who have used up their annual Isa allowance and who may have a capital gains tax bill.
The main advantages of investing in VCTs is that they allow capital gains tax to be deferred for investors with up to £100,000. They also offer 20 per cent income tax relief. The AIM VCT has a £2,000 minimum investment which could attract clients who have not used this type of tax shelter before.