The eTechnology venture capital trust has been launched with the intention
of investing in technology trusts and shares following the recent sharp
decline in prices.
It qualifies for 20 per cent income tax relief and 40 per cent capital
gains tax roll-over relief, with both profits and dividends being free of
Initially, it will be invested 100 per cent in technology unit trusts and
investments trusts as well as a few individual technology companies.
VCTs do not have to buy qualifying shares for the first three years of
their lives but Cavendish Asset Management, which manages over £50m within
the technology sector, will be investing in qualifying companies as and
when suitable investments arise.
The chairman is Michael Teacher, chief executive of Hillsdown Holdings,
and another non-executive director is David Svendsen, who was formerly
managing director and chairman of Microsoft.
This is a brilliant way of investing in technology stocks after the recent
market fall and with the best possible tax breaks.
Some of the main holdings will be the Close Techmark unit trust, which is
33 per cent off its high, Framlington NetNet (about 30 per cent) and SocGen
technology and Aberdeen technology (around 24 per cent).
Technology shares will certainly rise again. They have always been a
rollercoaster ride and the time to get in is when prices are low and you
can have tax breaks.
Unlike most other VCTs, eTechnology always aims to be fully invested. While the amount of money that the eTechnology VCT can take is limited, I believe that there other technology offers in the pipeline.