Govt amendment allows new VCT issues

The Government has amended wording in the Finance Bill to allow venture capital trusts to begin issuing new shares again.

Last month it emerged that VCTs had been forced to stop issuing new shares after HM Revenue & Customs guidance made it appear the companies would lose their tax-efficient status if they did so.

The wording of the guidance issued as part of the Finance Bill could have been taken to mean that any VCT paying dividends to shareholders who joined after 6 April would lose its tax-efficient status.

The legislation is actually only meant to prevent VCTs using new, uninvested money to pay dividends to investors from 6 April.

The Government has now agreed to amend the wording to reflect this.

Association of Investment Companies director general Ian Sayers says: “We are delighted the Government has acted so swiftly to address our concerns and provide greater certainty for the VCT industry and their shareholders.”

Separately, Octopus Investments is finalising its first VCT platform deal with an unnamed provider in time for new nominee ownership rules being introduced in July. The deal will include adviser and direct-to-consumer options.

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