Principle First Highlights Budget Plans To Make Venture Capital Trusts More Attractive
on: May 27, 2010, 05:53 am
Author: Principle First
Principle First has registered extremely strong demand for
Venture Capital Trust (VCT) investments driven on the one hand by the
VCT's numerous tax advantages, but also by proposed positive changes
in VCT legislation which were announced in this year's budget, which
if passed should allow VCTs to invest in a wider range of small and
medium-sized enterprises (SMEs) with up to 250 employees, and market
capitalisation up to £15m.
Gareth Flanagan, managing director of Principle First, said: "VCTs offer an unbeatable 30% tax relief
and there are now very innovative VCT models available which have very effectively
minimised risk. As the top tax bracket has now risen to 50%, VCTs are a more
attractive investment than ever, particularly for high earners."
Principle First believes the recent increased demand is due to the market conditions
which have made VCT investments extremely favourable at present. In the current
economic environment, where bank lending to SMEs is relatively difficult to obtain,
the UK's most dynamic companies are looking around for alternative sources of
finance - and see VCTs as an attractive option. Consequently, VCT managers have
never had such a range of good deals coming across their desks, and the quality and
standard of companies where they invest has never been so good. VCT investments offer a 30% upfront
income tax relief on investments of £3,000 - £200,000.
According to Principle First, the Octopus VCT, which minimises
investment risk, and Alternative Investment Market (AIM) VCTs have also benefited.
AIMs work best when investing in companies with capitalisation towards £15m, and as
such are poised to benefit strongly from the budget proposals to relax investment
VCTs are a valuable
and highly tax-efficient strategic investment which can be used in conjunction with
Individual Savings Accounts (ISAs) and a personal pension, as part of a rounded,
balanced and tax-streamlined financial plan.
Notes to editors:
The information contained in this press release is intended for journalists only. It
does not constitute financial advice and is not intended to form the basis of making
financial decisions. To obtain financial advice on any of these topics, please
contact Principle First for a free, no-obligation consultation with a qualified
About Principle First:
Principle First Chartered Financial Planners is one of the leading UK independent
financial advisers and distributors of mortgages, insurances, pensions and
investments. In 2008, Principle First became one of the few financial advisers to
achieve the status of Chartered Financial Planners.
Mr John Doherty
Principle First Financial Services
7 Racecourse Road
0800 678 5929