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Platforms and VCTs in talks ahead of nominee changes

Platforms and venture capital trusts are holding talks to pave the way for VCTs to be made available on platforms.

In the Autumn Statement this month, the Government announced it will change the rules to allow investors to subscribe for VCTs through nominees such as platforms.

Transact chief executive Ian Taylor says the firm is interested in allowing VCT shares to be bought via the platform and is speaking with several providers about how this would work.

He says: “There will be systems work to be done, but not a major amount. There is more work to be done in making sure copies of documents are at different places at different times.”

Hargreaves Lansdown head of VCT research Richard Troue is expecting further details about the VCT rule changes in the Budget in March.

Troue says although investors can transfer already purchased VCTs to nominee services, they cannot participate in dividend reinvestment schemes. He says the current process of getting into a nominee account is “a bit long-winded”, and expects the changes announced in the Autumn Statement will make it much easier to subscribe through platforms and allow nominee-held investments to be eligible for dividend re-investment schemes.

Octopus Investments says it is talking to firms about platform-based VCT subscriptions.

Plutus Wealth Management independent financial planner James Robson says from an administrative angle, the ability to hold VCTs on platforms will make advisers’ lives easier.

He says: “If you are able to plug VCTs into a platform, clients gain a lot more control over what their money is doing.”

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